Short Sale & Bankruptcy (NJ)?
I’m trying to work short sales with a homeowner that recently went bankrupt chapter 7. In NJ the Trustee takes control of the property after the bankruptcy. Last week the trustee, the homeowner and the other creditors had a meeting and the trustee released the property. I was told that I can now proceed with the short sale.
Question: Since the homeowner went bankrupt and the trustee released the property who’s property is it? I had originally contracted with the homeowner. In the eyes of the bank am I still buying the property from the homeowner?
Thanks,
I am not an attorney, but yes. As long as the bankruptcy court released the property it is owned by the homeowner until a sale is completed or the bank takes it through foreclosure. Always a good idea to have counsel, especially when bankruptcy is involved; but the bank and the title company both should understand bankruptcy proceedings and will not let the short sale commence with any cloud as to its legality.