I am not a real estate investor but I came across your site by accident today and it seems that most of your posts have helpful suggestions so I decided to write to you.
Back in October 1992 I saw a beautiful house which had gone into foreclosure and decided to bid (thru a R/E agent). The house had a lot of potential and was in a great neighborhood but needed some work. I made an offer on the property, which was being sold ‘AS IS’, and it was accepted by the Bank (Wells Fargo). Based on the other property values in the area this house was a good deal at the time. I opted to use Wells Fargo for the mortgage as they owned the property (the loan is a renovation loan which builds the cost of the renovation into the mortgage). Everything seemed to be going well; I got a lawyer for the closing and had a signed contract in place by November 2002. The bank stipulated in contract that they wanted to close by December 20th, and I had everything in place to proceed to that closing. I sold some securities to cover the closing costs, wrote a $10,000 check to the Bank’s attorney as down payment and ensured Wells Fargo received all the financial documentation they needed to issue a commitment letter. Then I got a call from my lawyer informing me that the title search revealed that the foreclosing attorney for the bank had not done the foreclosure properly and they had to go back to court to get an order of Nunc Pro Tunc. I was led to believe that this would not take a long time, but well over a year passed before I heard from the real estate agent handling the property.
Throughout this time I kept providing the bank’s loan processing unit with all the documents they requested to keep my file up to date. I really liked the house and by this time property values in NY had skyrocketed well beyond what I could afford. For me to purchase a home in this neighborhood today would be way outside of my budget. I decided to hold on and wait for the resolution.
In April 2004 the RE agent called and told me that the title issue had been resolved and we could finally proceed with getting a closing date setup. I once again went thru the process of selling securities in order to move cash back to my bank account for the closing as instructed. Then the boom dropped again when my lawyer informed me that the title search had shown that cure of the title was not satisfactory and there was apparently still a lien which the bank’s foreclosing attorney had not taken care of. Needless to say I am very upset as I cannot understand how a bank like Wells Fargo could allow a property to come to market without making sure that it was marketable and Title was clear. I spoke to the loan officer handling my mortgage (from Wells Fargo) and he contacted the bank’s lawyer and told me that they were still working on the problem.
All during this time the mortgage unit kept requesting updated financial information; all of which I provided. After going thru all of this my lawyer finally informed me in April of 2005 that the Bank’s attorney had returned my down-payment to him. I contacted the guy handling the mortgage and after a couple of day he told me that the bank was going to court in June of 2005 regarding the title and that after the title was resolved the Bank would reissue a new contract at the same agreed price on the original contract.
I have still not heard anything else from the bank since then. I have called on several occasions but have not been able to get anyone to speak to me regarding the situation. All I wanted to do was buy a home to live in and it turns my stomach to see how reprehensible Wells Fargo has behaved in this situation. I have not yet cashed the returned down-payment check and I am contemplating if I have any recourse against the bank? I feel strongly that the Bank is negligent in how they have handled this case especially since I have kept up my end of the bargain and done everything they have asked. I can’t believe that this is how other banks handle their foreclosures and treats customers.
I passed by the house just this week and see that it is still boarded up and the same RE company has their sign posted on it. What do you suggest I do? I do not have a lot of money to spend on lawyers but feel that Wells Fargo should not be allowed to treat people this way. The lawyer I was using is not a RE lawyer so even if I do decide to take action (if I can) I would need to find a good RE lawyer in Brooklyn.
What do you think; should I walk away from this knowing that I am not going to be able to get a house in NY at this price or should I fight it? What can I do in this scenario?
I would really appreciate any suggestions you have to offer on how to handle this problem.
Thanks for your valued advice.