Bank Foreclosing on Property I have an interest in

[SuperCat]

What is the name of your state? South Carolina
Here's a "goodie". In 2001 I sold a piece of property to a "then" fiance. I had obtained the home in my divorce proceedings the prior year and was given a year to get the home financed soley in my name. I could not qualify for financing, but my fiance could so we put the home in his name. To qualify, he agreed to pay me the downpayment "under contract" and never came forth with that money, of course. Things went south in a big way and we never married, nor do we live together (I have been gone for two years). Subsequently, I sued him for the down payment amount in circuit court and that case is pending. During the last two years, he initiated a "bond for title" on the property with some other people. When I found out about it, I raised hell and he signed a contract giving part of the proceeds from that bond for title. Well, those people abandoned the property 8 months ago and were never heard from again, my case is still pending in circuit court for the $30,000 down payment he never paid me "under contract" ,and he has fallen about 4 months behind on the mortgage payments. The bank holding the mortgage found out about the "bond for title" which he wasn't supposed to do, according to the terms of the mortgage, and they have now started foreclosure proceedings (filed the papers last Monday 2/17). I found out about it thru an internet search and my name is listed on the foreclosure papers as an "interested party", I am guessing -- I have not been formally "served" any papers yet. I guess because of the legal claims I still have concerning this property the bank deemed to cover their butt by listing me as well. I am not on the deed to the property nor am I on the mortgage papers. The fact that I have "interests (these lawsuits)" against/in the real estate is the only reason I can fathom that I would be on these foreclosure papers. Should I just sit tight, wait to get served, and then follow what happens? Is there some sort of pre-emptiv action I could take? I still really like the real estate, should I go to the bank with some sort of offer?

 

[seniorjudge]

Q: The fact that I have "interests (these lawsuits)" against/in the real estate is the only reason I can fathom that I would be on these foreclosure papers.

A: You are correct.


Q: I still really like the real estate, should I go to the bank with some sort of offer?

A: Sure, if you want it. They would rather have your money than the land.

 

[Tommy T]

While the bank is required to notify all parties with any interest of record about their foreclosure, they cannot legally discuss this loan with you under privacy law, other than such information they make public through the foreclosure process, since you are not the borrower. They cannot discuss selling you the property until such time as they might regain possession as the result of the foreclosure sale (assuming no one buys it at the sale), it is not theirs to sell at this juncture. After the sale would not be the best time to deal with them, as they will most likely want all cash and you would be competing with other buyers. They could care less about your pending suit, it alone will not prevent them from foreclosing. It sounds doubtful that there will be any assets to go after should you prevail in your lawsuit?

Idea: Offer to drop your suit against the ex, in exchange for possession of the property, along with a long-term lease and option to buy, purchase price to be equal to the remaining loan balance at time of purchase, lease payments equal to the current loan payments. Reinstate the loan to stop the foreclosure, as part of the deal. This is a good deal for the ex, he gets: out from under your lawsuit and possible judgment, out of loan payments in a property he clearly can't afford, avoids foreclosure showing on his credit for the next 7 years. Be sure to record a memorandum of option or whatever is customary there, to cloud the title so the ex can't easily refi out the equity or sell the property out from under you. At the end of the lease term or sooner, you refi and purchase, or sell your option position to someone else and get your equity out.

Curious as to why your $30K was never secured by the property? You would have more choices on what recourse you have now, had you been secured on the property, I'm gathering that you were not.