My brother purchased an investment property couple of years ago with the intention to fix it and flip it. He bought it with a liveable attic, but during the repairs the town made him stop the renovation and told him that the house can not have a liveable attic except for storage.
Unfortunately this created a nightmare because the house can not appraise at the forecasted value therefore he had to carry the mortgage and now he is in the hole. The house is in preforclosure and most likely the auction will be within the next 60 days.
The house is worth about $430K and he owes about $400K, my question and this is the part that we need help is, can the bank go after him for the deficiency of the loan in NYS? what other options do we have to prevent the bank to go after his primary residence?
can we sue the realtor that sold us the house as a “legal liveable attic”?
I thinkt the first part of the reply from JDS might be a little confusing. The Lender can go after him for a deficiency judgement. I you are going to attempt the SS the you must contain in your offer or P&S something along the lines of… “this offer is contigent upon the waiver of deficiency judgement against (insert persons name) and said property”.
Or what ever you want to say. If you don;t have this in your contract you can proceed with the judgement if they wish.
good luck sueing the realtor. Not sure how that is going to help you in this situation. I can pretty much gaurentte that there is nothing this the origianal P&S that say anyting about livable space in the attic. I could be wrong though.
It is water under the bridge now but this is a perfect example if why you should do your due diligance on EVERY property you buy.