Short Sale & Redemtion Period

Hello All:

I have a conundrum. I negotiated a short sale, which was approved. I got a buyer. However, the title discovered a lien in the homeowner’s brother’s name.

I notified the bank. the negotiator told me to just inform them when we resolve the lien issue.

Unfortunately, the homeowner did not keep any record of anything, plus the brother lived out of state. Therefore, it made it quit difficult to locate and contact the creditor.

I emailed the negotiator last week with an update. I emailed them again yesterday to inform her that we are making progress and will close on September 12th.

I got a response back today, that the property was foreclosed on yesterday, August 13, 2008. I am just blown away. I did not see this coming. I called the bank, to check status of the auction. I am told that it was sold.

The question I have is, does anyone have an idea or recommencation of possible options to recover this deal? Is there anything I or the homeowner could do at this point to redeem the property?


(Homeowner’s mother co-signed on the original loan. shortly after the purchase, the mother passed away, without a will, automatically making the other sibling, as heirs part owners of the property).

The other siblings subsequently deed the entire property to the homeowner. However, apparently, the judgement had already been made and the lien attached.

The lien was for $20,000. They demanded $10,000. I offered them $5,000 yesterday. I was still waiting for their response.

I don’t know what the redemption period is in your state, but in Kentucky the HO has one year to purchase it back from the person who bought it at auction for the amount they paid. Also, I believe they can charge interest.

In New Jersey, the homeowner has 10 days to challenge the sale, and get a stay of redemption. I went to the court house this morning, got the forms to file the motion to stay the sale.

The homeowner will complete it, and I will take it to the court on Monday. I am optomistic. I believe that we have strong case.

I will post the outcome.

Depends on your state wheither it went judical or non judical.
Going thru courts system is 1 year. The other one, all sales are final