Help Bank Of America backing out of Regular Sale

PrettyPistolNovember 29, 2011

We put in an offer on of a Bank of America VA owned home.The offer was signed and accepted by the Bank with a closing date of 11/23. After the appraisal and inspection was completed our loan was lined up and we were ready to go we received a phone call from our title company saying the bank wanted us to sign an addendum extending closing to 11/30 because they were having an issue getting clear title. Understood however BOA's title company contacted our title company (who sees no issues with title) that they have a title issue and can not close on time and refused to elaborate on what the exact issue was (went so far as to tell my title company and real estate agent that it was non of their business what the issue was and that all they needed to know was that there was an issue).

So closing is supposed to happen tomorrow and we get a call from the listing agent stating they haven't cleared this phantom title issue (while still refusing to disclose the actual issue) and they will be backing out of the contract and pulling the house from the market. The only clause that the BOA can back out of the contract would be for clear title, yet they refuse to tell us what the issue is let alone provide us any proof that there is any actual issue...

Now were out the appraisals, inspections (well get the deposits back) and living in a hotel... My agent said we should just walk away and doesn't think we can sue... I thought she was supposed to be protecting us? Can we do anything like file a lis pendes on the house or sue them for breach of contract? Sue the listing agent/ report him.. he clearly knows whats going on and refuses to talk.. what are our options at this point.. PLEASE HELP

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51gerri

Only a lawyer can tell you whether you can sue, but how long do you want to live in a hotel?? Just walking away is probably your only viable option. I doubt BOA would back out without a good reason. There's a good possibility mistakes were made during the foreclosure that will take a long time to correct. It's really hard on you, but I don't think there is much you can do other than just walk away.

    Bookmark   November 29, 2011 at 8:56PM
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Billl

BOA doesn't want the house. They aren't trying to "get out" of the deal. They are just an incompetent company and you should expect this type of stuff when dealing with them.

If you needed a house by a specific date, you should have never looked at foreclosures. The cost of getting the foreclosure deal is playing the waiting game and jumping through hoops.

At this point, you can either walk away from the deal or wait for BOA to get their act together. Forget any thoughts of suing them or trying to pressure them to hurry up.

    Bookmark   November 30, 2011 at 8:00AM
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brickeyee

BoA probably does not have a clear path to who owns the note on the house.

Between MERS and just general stupidity in not maintaining paperwork there is probably not a clear chain of ownership for the note.

That means BoA cannot prove it owns the note, had the right to foreclose, and cannot now convey title since they cannot prove they owned the note.

It should be noted that MERS (Mortgage Electronic Registration Systems, Inc.) was founded to avoid the need to record note sales with courthouses and allow for faster electronic trading of the notes without paying recording fees.
The validity is all over the place, with some states accepting MERS title, wile others have rejected it.

The MERS system was founded by Countrywide�s, Anthony Mozillo and Fannie Mae�s, James Johnson.

And you know how Countrywide and Fannie both ended up.

Broke.

    Bookmark   November 30, 2011 at 10:16AM
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conchitaFL

Yes, with all the different organizations that BOA took over, it's an incredible rat's nest. A neighbor did a short sale on her BOA-mortgaged home, but had to go through the entire process about 3-1/2 times when BOA repeatedly insisted it had no documentation on the property at all, although they were the only mortgage holder.

Then we had a foreclosure on another unit here, with BOA and our HOA as the lien holders. BOA foreclosed, set up the auction (necessary here in FL) and never showed up, so the HOA bought the place at the auction. However, they've never been able to get BOA to acknowledge that they (meaning BOA) had any interest in the unit, and now BOA just sent the PO a letter threatening to foreclose, although he's already been through the entire process.

It's all just a mess.

    Bookmark   November 30, 2011 at 10:26AM
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PrettyPistol

yea, the house is in coral springs florida :( If anything I want to be compensated for what we have already spent and living expenses wile we find a place to rent temporarily... or at the very least them to acknowledge what the actual issue is, you know show proof that they have any real title issue to back out unscathed

    Bookmark   November 30, 2011 at 11:52AM
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don_1_2006

Unless you are setting on a pile of money don't even think about suing. Going to court is just a part of doing business with them but it could bankrupt you.

    Bookmark   November 30, 2011 at 12:33PM
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terriks

Why did you refer to this as a "regular sale" in the title? A foreclosed VA owned home is not a "regular sale". And you certainly don't want a home that doesn't have clear title.

    Bookmark   November 30, 2011 at 12:53PM
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brickeyee

"Why did you refer to this as a "regular sale" in the title? A foreclosed VA owned home is not a "regular sale". "

Once the foreclsoure process is completed the house becomes REO (Real Estate Owned) to the bank.

The sale is not all that different from purchasing from any other seller, except the banks do not like to lose money and are often slow to react to offers (especially if they wil be losing money on the deal).

You are likely to get a 'special warranty deed' instead of a 'general warranty deed.'
If you get title insurance (owner's policy) it is not hat much different.

A special warranty deed means the grantor did not encumber the property, but disclaims previous owners and will not defend against claims from previous owners.

A general warranty means the grantor will defend against ANY claim against the title as far back as the land has been titled.

If you get title insurance the insurer will make very sure there are no problems.
They HATE to pay title claims.

    Bookmark   November 30, 2011 at 3:05PM
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rrah

I am not an attorney, but I do not believe you have any basis for a lawsuit to recover any costs. The contract states, according to you, that BOA can back out if they cannot transfer clear title. They are exercising that part of the contract. I would be willing to bet that the contract also includes language that states BOA is not liable for any costs the buyer incurred while going through the sale process. Typically these contracts on foreclosures have some such language.

All you can ask for is a statement or an amendment from BOA indicating that they are exercising that clause of the contract. Tell your agent you want the amendment from BOA if it makes you feel better. Also remember that the listing agent legally represents BOA. He cannot necessarily disclose some information to you.

    Bookmark   November 30, 2011 at 3:10PM
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PrettyPistol

Thanks RRAH that would give me piece of mind and sounds like a good idea.

Brickeyee: I refereed to it as a regular sale by mistake, I was just trying to clarify that it WAS NOT a short sale because I have seen similar posts referencing short sales and wanted to be clear that it wasn't a short sale... I mispoke

UPDATE: Our real estate attorney through the title company is trying to get paperwork drafted that indicates we have "right to first refusal" under the original contract terms.

    Bookmark   November 30, 2011 at 4:20PM
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PrettyPistol

Now were being asked to sign a release releasing the bank from the contract.... WTF... why in heel would we sign a release?? This is such Bull

    Bookmark   November 30, 2011 at 6:46PM
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brickeyee

"Now were being asked to sign a release releasing the bank from the contract.... WTF... why in heel would we sign a release?? This is such Bull"

Probably a bank attorney doing CYA.

If you sign they can then claim YOU voided the contract.

I would refuse to sign the release.
They have a problem, NOT YOU.

Tell the bank THEY need to send you (in writing and signed) something that shows THEY are invoking they cannot deliver clear title and are withdrawing from the contract according to its terms.

    Bookmark   December 1, 2011 at 9:43AM
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PrettyPistol

okay now Im being told in order to get my escrow deposit of 5k back we need to sign a release through the title company... I should not do this until I have a letter from the bank stating THEY backed out of the deal right?

    Bookmark   December 1, 2011 at 10:44AM
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cas66ragtop

Sounds like you definitely need a good lawyer to help you. Don't sign anything.

The "clear title" thing - could it be possible a bank employee/friend/family member or someone who made a higher offer wants to steal the house away from you? Unethical and illegal, but who says banks are honest?

It's their fault you can't close, and they shouldn't be denying you of your deposit. Thats BS. I hope you aren't still going forward with the right of 1st refusal - I would totally forget about this house.

Good luck. Sorry to hear its turned out this way. Hope you get your money back soon.

    Bookmark   December 1, 2011 at 11:24AM
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feedingfrenzy

Get your own lawyer ASAP and don't assume that the title comapny lawyer is representing your interests. S/he is representing the TC's interests, which are quite different from yours.

    Bookmark   December 1, 2011 at 3:19PM
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Billl

"okay now Im being told in order to get my escrow deposit of 5k back we need to sign a release through the title company... I should not do this until I have a letter from the bank stating THEY backed out of the deal right?"

If you want your deposit back, that means the deal is dead. It doesn't really matter who killed it. The only compensation you can get when a deal falls through is the return of that deposit.

If you want to CYA, get your own lawyer involved and make the bank officially void the contract. If you just want your money back and want to start looking for other homes, you can just take the money and go. Not signing that paper will NOT force them to go through with the sale though.

And yes, if the title company is holding the deposit, they most certainly will require both parties to sign off on any release of funds.

    Bookmark   December 2, 2011 at 8:57AM
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brickeyee

"they most certainly will require both parties to sign off on any release of funds."

Signing off on release of funds is NOT the same as acknowledging who voided the contract.

The problem is that this is not a large enough amount of money to spend much on an attorney to recover.

The title company should simply want paperwork fro each party agreeing that the contract is void.

Who voided it is should not be part of the picture ad long as it is mutual between the parties.

    Bookmark   December 2, 2011 at 9:30AM
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