sub 2 seller trying to get property back

bought property sub 2 and giving them a 0% balloon note payable in 4 years. I liked the house so moved in with my family. Lost an account in my full time job causing a slow couple of months. Paid jan and feb late but I have paid them and loan is current. Mortgage company called them about the late payment. Today I recieved foreclosure letter from attorney from them on their note I gave them. No payment is even due to them for another 3 years. Please advise as to how to handle this.


First if the note you have with them has nothing due for three years then how can they due aforeclosure on you and that note

Second if there note is current how can they do anything there

Third did you get the home moved into your name with a warranty deed ?

if so the thought that they can really do much on this is not well founded at all

For all legal reasons this house is yours

It depends on what was in the contract about paying late. You need to make sure there isn’t something in there that could trigger them calling the note due.
If they have an attorney there could be a problem with the 0% interest. The IRS imputs interest if its lower than a certain rate and the seller gets taxed at that rate. The attorney might try to say you took advantage of the seller due to this. You might want to consult an attorney to see where you stand. If they have one you will probably need one too.

Good luck,

I see nothing in the note to them even referencing the underlying financing from the mortgage co., but I am going to get an attorney to look at it today. I have called them and left messages for them but they have not returned our calls. I have invested alot here and made lots of improvements. They were 5 payments behind only 6 months ago I cannot imagine what they are thinking.


When you did this deal did you have the property warranty deed to you yes/no ?

As this could make a differance on how things are looked at from a legal stand point

So you are really not in a default on your note with the seller and you are not behind on the sellers mortgage right?

If this is the case i am at odds as to what is going on with your deal

Don’t forget to have the attorney review the consumer protection angle. The sellers could complain to the AG who would then investigate and come after you if he doesn’t like the deal.

Coop, Was that 5 months they were behind ever made up? Herbster


I think it was from the first post as he said it was in default but now is all current but was a little late on a payment or two after that

I think this is the way i read it


I see this as a breach of contract issue. You contracted with the seller to take over his mortgage. I believe there is an implied contract that you will make all payments in timely manner.

You did not. You damaged the seller’s credit rating. You may be sued for breach of contract, and the plaintiff’s remedy will be to void the contract and have the property returned to him

If you don’t already have an attorney looking at this, why are you waiting?

Have an appointment on monday with attorney. Got an email from them yesterday that said that if everything stays current as of April 1st they have no problem. It was not run the the local news paper this week do they not have to do that for 4 weeks in a row. They cannot get that done before April 1st at this point. Am I correct that it has to be run the in that paper for 4 weeks in a row?? Thanks for the input I will keep you posted.

I do not see how they can do much on there note with you as it has nothing due for three years

What is it they are trying to say you are in default on if the mortgage is current and not behind

Alot of people do not get there mortgage s pay right on time every time but they get them payed

I think i would be more worried as you said you have no job at this time ?

How are you going to make the payment?

I do have a job I just said that I lost an account that was a big commisssion maker. I just hit a little slow cash flow time but it is ok.