I am seeking advice before starting a legal action.
Here is my story it’s sad but true…
A broker set up a transaction for me with a person that was in foreclosure. The transaction was as follows.
Seller: Facing foreclosure @ 45K on a house that is valued at 115K.
Buyer: Got house for 84K plus 10K back at closing for a total loan amount of 94K.
After reviewing the HUD on the sale, I see that the house had a 2nd mortgage placed on it for 37K by the Broker’s property Management Company.
Does this look like the broker put the lean on the property to take the extra equity? Or is this a normal practice? One thing that raised suspicion for me is that final HUD was some how left out of our copy of the paperwork, and I had to request a copy of that from the clerk at the office.
Everyone with experience please weigh in on this. I am seeking a real estate attorney’s advice on this soon and I’d like to know if I have a legal leg to stand on first.
Please let me know, thank you.
Please email me if you would like to see the total HUD if needed. Thank you.
The question in regards to the lien does not lie on your behalf, but on the side of the seller. Did the seller authorize for the lien to be placed or know about it? You agreed upon the sale price, and whatever happens between the broker and the seller has very little to do with your transaction.
I am not sure if the Seller had any knowledge of this happening.
The seller received a very small pay back to my knowledge. (Around 7K)
If the seller agreed then does this mean I have no case?
Are you thinking that because the broker had some sort of an interest in the property ie…a second mortgage that he should have disclosed that?
The property could have had 3 mortgages on it, or it could have been free an clear. I don’t think that the mortgages have anything to do with you agreeing to pay x amount for a property.
Good Luck to you.
a house that is valued at 115K.
Where did that price come from?
If it came from THAT broker. Immediately go get your own comps. If the comps are way out of line. Then go see the attorney.
That is one of the reasons you should have a buyers agent on your side.
Was a title search done to check out all liens on the property first…
I don’t see how you’d have a case against the broker except to go after their license if they did not live up to their ethical or legal duties. You can run the case by the local real estate commission or Board of REALTORS® if the agent is a member to see what they think.
NOW…if the broker gave you very incorrect comps (and you have written proof of this) or lied in any way, they can have actions taken against them by those aforementioned entities. He can be in even bigger trouble if the issue falls under federal consumer protection laws regarding false or misleading statements or misrepresentation. I’d recommend speaking to a lawyer who specializing in residential real estate and/or consumer protection cases.
On the second lien issue… you agreed to the higher price, so I’m not sure what type of damages you would claim. The seller could have agreed for broker pay off junior liens. You wouldn’t be privy to that information, so would have to ask the seller or broker.