I just acquired a property about 6 days ago and I just found out that the former owner is suing the bank for illegally selling the property. What should I do? I don’t have the Trustee’s Deed yet. The property is tenant occupied, it was the tenant who told me.
Contact the trustee and ask if they are aware of the lawsuit. Next check title to see if a lis pendens (notification of pending lawsuit) has been filed against the property.
If neither of these are true, then you’ll need to decide between just rolling with it and not worrying about it (lots of times it is just someone spouting off - actually suing a lender in these cases is an expensive proposition), or attempting to contact the former owner and asking them about their plans.
I did the later in one case and found the owner had a bank document promising to extend the sale. In this case it was very clear to me that the owner would ultimately win and I had no desire to be caught in the middle. I asked for a copy of the document, then contacted the trustee, showed them the document and asked them to rescind the sale. After they verified the document was legitimate they did indeed rescind the sale.
In another case I did get caught as a party to the lawsuit, and I simply had to wait it out. In that case, the lender didn’t mess around. They brought in the big guns and it only took a couple of months before the homeowner abandoned their lawsuit.
Can one co-owner sue the other co-owner of a home that is going into foreclosure? Due to a split in their relationship the home is going into foreclosure.
Sure, but that won’t stop the foreclosure.