Foreclosing on a wrap loan - worst case

Hypothetical situation here:
You sell a house on a wrap loan and have money put aside for a few months mortgage payments as backup (is 3 months typical?) and a little ‘u-haul money’ (how much typically?). The buyer stops paying, and refuses the uhaul money to sign the deed back. The only choice at that point is to proceed with foreclosure, correct?
(1) What’s the timeframe and cost on my end going to be to complete that entire foreclosure process with an uncooperative buyer?
(2) If the buyer enters into bankruptcy then I’m really screwed, because that freezes everything, right?

(This is central Texas, BTW)

So has anyone had a deal that got that bad?

I’m in one now. My buyer stopped paying and forced me to foreclose. Two days before it went to the courthouse steps he brought it current except for one month. He paid 3 months worth plus attorney fees. This enraged the seller so much he called the bank and faxed over the closing documents.

The mortgage company required a simple assumption or to refinance. My buyer cannot qualify after attempting both. He also refused to pay another payment until he could get refinanced or the mortgage company accepted is assumption. He did move out 2 weeks ago. The seller is now sueing me for back payments.

Both the buyer and seller have threatened bankruptcy. I’m in a no win situation.

ugh.
so what is exactly is your role, if you’re not the buyer or seller, in that deal?

I’m just trying to learn how to get myself out of a deal if I get in one…

In my case, I sold on a wrap. I purchased from the seller and sold with a wrap to a buyer. I collected a payment from the buyer, paid the lender, and kept the difference.
In my state, it takes 60 days to foreclose on someone. It would cost me around $600 for my attorney to handle it. I’ve had to do it once. I start foreclosure after they are 30 days late. It’s only happended once with several dozen deals.

I spoke with Cash this morning who sells with a Contract for Deed. It’s just not done that often in Georgia so I’m told. However, I will start on my next purchase.

If you do not have a closing attorney at this point who will be closing your deals, this is a good time to find one and ask them. Everyone around here sells with a wrap and prays nothing like that happens. I’ll keep my prayers for other things and fix my real estate problem with different wording in my contract or sell with a Land Contract. Don’t always go with what people say, but make sure you understand why.

unless your state requires it, I would avoid selling on a wrap. Always own the property till refi time if possible.

Trust me, I’d rather go w/ a Contract for Deed, if it wasn’t for the larger down payment I could get w/ the wrap.

^^^
…and the fact that I’m in TX.

well yes in TX u have to do a wrap unless the note is in your name or the property is free and clear.