Investor · Decatur Atlanta, GA · Member since 2011 · 611 posts · 232 votes
We closed on a short sale (after nearly 5 months) and have the HUD and were getting ready for demo when we received a call from the seller's agent. She said that an attorney for the seller filed bankruptcy 2 days before our closing, however, she was suppose to wait until after the closing so the home wouldn't be listed as an asset. She did not include the home as an asset. The bank sent the money back to the closing attorney. I've got a call into the the bankruptcy attorney, however the seller's agent said we should be ok after the May 16 court date. We had just started demo. Has anyone ever heard of this before? I've researched on Bigger Pockets and haven't found a similar scenario, but am wonder should I contine with work or hire an attorney?
The bankruptcy trustee won't have any interest in the underwater house. But, you could have further delays, it may depend if it was a 13 or a 7. I would wait. The bank will likely have to issue a new approval, and you'll have to close again.
So glad I did! The original lender asked the court to remove the home from the bankruptcy, which it did, but it took a month for it to be recorded. We closed again last Tuesday, now Sertus is asking for the release papers. Odd thing is they were responding to the listing agents email that had the release papers attached. Hope to have them realize this, but most likely after the 4th.
Hung in there because this is a good deal and this is a spught after area and deals are hard to find. Plus is a Mid-Century Modern and it's going to be fun to do
.sometimes patience is a virtue.