Buying a home in the process of foreclosure

[shaw]

We are in the process of buying a home that it is in the foreclosure process. The home was listed for sale by a realtor and we did not find out that the home was in foreclosure until we recieved the title search results. Now our bank wants a letter from the sellers mortgage company stating that once they receive the funds (which aren't enough to pay off the current mortgage) they will with Lis Pendins and stop the foreclosing procedure. The sellers mortgage company faxed to our bank the short sell documents which states the mortgage will be satisfied once funds are received but our bank wants it to state foreclosure will be satisfied. Is our bank being overly cautious or is the loan officer in line with asking for the letter from the mortgage company? I spoke with the mortgage company direct today and I was told they will not issue this letter. Can they still impose a 17,000 lien (the amount of the short sell) on the house? Our closing date is 11-30-00. Can the title company be involved in obtaining this letter from the sellers mortgage company?

[Edited by shaw on 11-29-2000 at 01:06 AM]

 

[HomeGuru]

Your bank can ask for any document they want to insure that their interest will be protected. If I was the attorney for your bank I would be asking for even more documents. The property must be closed free and clear of the existing first mortgage AND the foreclosure action thus no lien for the shortfall. Otherwise it is not a short sale.

[Edited by HomeGuru on 11-29-2000 at 12:39 PM]