What happens to me if the land owner defaults on his morgage and i am the buyer in the contract for deed?

Do i have any legal rights.

8 Responses to “What happens to me if the land owner defaults on his morgage and i am the buyer in the contract for deed?”

  1. Ted Says:

    You lost your money.

    You can sue the land owner. You can ask for money from the mortgage holder if they get more than the mortgage amount and their expenses when they sell off the property, although, in this market, that isn’t likely.

    When you enter into a real estate deal, you are agreeing that someone who has a lien on the property ahead of you has the right to be 100% satisfied before you get anything. That’s why "contract for deed" sales are priced so attractively: the person contracting doesn’t have a deed or a lien, so they have no rights.

    Note that most contract for deed transactions are technically illegal because the person who has the deed obtained the mortgage probably got a low rate by promising to occupy the property as his principal residence. If he moves out without paying off the mortgage, he is in violation of his loan covenants and is committing a fraud on the bank and you are conspiring with him. You should not expect much sympathy from the bank or the courts.

  2. jazzy Says:

    Yes u do

  3. jm Says:

    yea

  4. kemperk Says:

    if you are unable to re-finance before the current deeded owner
    loses his house, UNLESS your land contract has protective
    devices written within it, you lose your deposits and extra payments.

    all land contracts thus need either insurance to cover the
    mortgage if the owner defaults…….or the deposit -down-payment
    needs to be kept in escrow….to protect the land contract occupant.

  5. Pojo Says:

    You have possibly entered into an ILLEGAL contract to begin with. Without the permission of the mortgage company the current owner has no right to sell you anything. They can not sell the collateral for the home loan.

    Now did you have an Atty go over this contract? Has it been registered with the proper deed office.

    You may have absolutely no rights and this is the very reason such a contract is very dangerous. You could be given 3 days in a foreclosure to get out.

    Get an Atty versed in RE to look at your contracts.

  6. teran_realtor Says:

    This is one of the many reasons why NOBODY should buy a property via contract for deed when there is an underlying loan involved. You have the right to sue the seller…… do you think he has any money?

  7. goz1111 Says:

    The lien holder has a superior interest in the landlord versus yours as such is free to reclaim the land if the borrower defaults on the note, your recourse is against the seller if they have any assets

  8. Russel Stadther Says:

    I’ve noticed this online store where u can buy nrg-1 online is this above board?