I enjoyed your recent visit as guest speaker at the High Desert Investors Network meeting in Palmdale, CA. ?
I have a question. ?We bought an bank owned property from the online auction done by Auction.com in September with title insurance… ?However, I received a call last night from an attorney who is representing Bank of American.
He stated that the bank may have wrongfully foreclosed the former owner because the bank foreclosed on them after the owners filed bankruptcy, even though the owner’s BK got denied, but was still filed before the foreclosure. ?He said the bank may have not properly given them notice. ?Therefore, the bank may have the rights to buy the house from us. He asked if are willing to sell it back to them. Is this crazy? ?Can they do this?
Please reply, so I can sleep better tonight.
If the bank is offering to buy the house back, instead of rescinding the sale, its possible they don’t really have a leg to stand on.
Lots of possible scenarios here, but even with the worst you’ll get all your money back. The first thing I would do is look up the bankruptcy and review all the filings, which you can do here:?http://www.pacer.gov/?for a fee. See when it was filed, whether or not there was a motion for relief from stay, etc. If it?s clear the bank did screw up and that the sale is invalid, then your best bet may be to negotiate with the bank. Give them a full list of all expenses, and request interest on your money. Alternatively you could file a claim on your title insurance policy - but I think they would be less likely to cover your lost interest.
If on the other hand it appears the sale was valid (bk filed later, motion for relief was granted to bank, etc) then you have additional options, including telling the bank to either provide evidence the sale was invalid, or to pound sand. Note they could file a?rescission?of the trustees deed anyway, and then at that point you’ll have to go to court to either get the house or your money back.
Unless you really know this stuff inside an out, hiring an attorney to help probably wouldn’t be a bad idea. The outline above is based on my experience, but there are lots of nuances.
This stuff happens when buying at trustee sale, try to think of it as a learning experience. Sleep better knowing that you’ll definitely get your original bid back, almost certainly your expenses and probably your interest/profit too.
Thank you for responding to my question. ?Sorry for all the “typos” and sentence structure in my previous message. ?It was a sleepless night. ? Actually, the attorney did mention the word “rescinding” in the conversation. ? I am not sure how they can do it since it was NOT a trustee sale and we went through escrow and everything. ?On top of that, we are in escrow and planning to close escrow in less than a week as a flip. ?I am curious if the bank can continue their witch hunt once it’s sold to new buyers?
Thanks again, Chris