Subject-2 buyer not performing

[Julie Falen]

I sold a property Sub 2 in 2013 on a 5-year balloon. No escrow. Buyer sold the contract to someone else. Balloon was due in 2018. He has not performed, has not paid taxes or insurance so my balance went way up with forced escrow account, and loan has gone to 10% (It is/was a HELOC) I need legal help to bring suit as statute runs out August this year! Has anyone else encountered this issue?

[Ben Zimmerman]

Quote from @Wayne Brooks:

I think we are on the same page now.  The original verbiage seemed to imply that "an actual sub2, there are no foreclosure possibilities", when a more accurate description is there are foreclosure options, they just take longer to process through the courts because you would first need to obtain a judgement lien against the property and then try to collect on that lien unsuccessfully for several months before filing foreclosure.  You understood what you were trying to say, but some others may have taken your words more literally and assumed that foreclosure was simply not an option at all.

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Personally if I was the OP I would immediately begin the process of using my sales contract to obtain a judgement lien on the house from the courts.  Ideally the lien amount would be for the full remaining balance plus any applicable interest/fees that have been charged, additionally depending on the particular laws for the state it might be worth trying to get lawyer fees added to the lien, as well as any possible damages imposed on the OP based on things like credit scores dropping due to the buyers missed payments.  This last one is super longshot both in general, as well as in this particular case since the OP didn't file a claim for 4 years which makes it very difficult to convince a judge that you were harmed in any significant way and still decided not to file a claim until years later.  Even though it's a longshot, its still worth at least asking your lawyer about.

Once you have the judgement lien, I would begin sending certified notices to the buyer, as well as the current owner of the property if it has in fact been resold.  After unsuccessfully collecting on the lien for XX amount of time based on state law, I would then begin filing foreclosure and obtain funds by forcing the sale.  Personally I would think that trying to unwind the sale would be more difficult than it's probably worth given that the home has since been resold again, and simply forcing the sale through foreclosure is a clean break that closes this chapter for the OP.