Profile picture for Lisacindy

Can Freddie Mac cancel a contract 3 days before closing?

I was set to close on May 9th and on May 6th Freddie Mac cancelled the contract and took the house off the market due to the title search finding the military affidavit unsigned.  I told Freddie Mac that I was willing to wait until the title cleared, however they proceeded to cancel everything. Do I have any recourse to force them to sell to me. I am afraid that when the house goes back on the market I won't get it. I am just stunned that this happened.
  • May 09 2011 - Pinellas Park
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Answers (8)

One of the downsides to buying a foreclosure is the fact that there is typically a very one-sided contract.  So the answer is likely "Yes" they can cancel the contract with a bona-fide title issue.

Work closely with the attorneys for the bank and hope that when they have cleared the issue they would prefer to go back to you for a quick and hassle free deal, than start all over.

I wish you luck!
  • May 14 2011
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Profile picture for Lisacindy
Thank you all for your thoughts and support. It has been helpful to hear your take on this. I will remain positive and know that it will work out. This was just such a shock to the system! Thank you again.
  • May 12 2011
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Profile picture for Sharon Lewis
Thats so awful....I am assuming you were boxed up, ready to make the move, lease terminated where you were living (if that is the case) It is totally unfair. However, on the flip side, when this house does come back on the market, it might come on at a lower price!!! This is the spring market, that house might hit the market in the summer, when things potentially slow down...This could save you thousands....so we will keep our fingers crossed.
sorry to hear about your troubles, not fair....I hope you find a wonderful new place that is a lot less expensive :)
  • May 10 2011
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Its unfortunate but what if they never found the concern and the foreclosed homeowner sued Freddie and you are already in the home, that would be a real debacle. This may take awhile to sort out as the origional mortgage was never completed properly I would recomend looking for another property.

  • May 10 2011
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Profile picture for the_country_hick
Read the article shown below.

Holmes v. Summer: dilatory disclosures and the damage done | first tuesday journal online

"Holmes v. Summer provides a watershed moment in case law for brokers and their listing agents.  Holmes reestablishes proper conduct for listing agents and their brokers regarding the timing of property disclosures

(specifically title condition disclosures in the Holmes case).

 Holmes mandates that all disclosures of material fact about the property, known to either the seller or the listing agent, which might influence any of the buyer's decisions about purchasing the property must be made to the buyer by the listing agent prior to acceptance of an offer, not after an offer is accepted and escrow is opened, as has become the generally accepted custom amongst brokers and agents today."

I do not know if this applies to you but it might. It appears that Freddie did not have the legal right to sell the house and they should have known that before placing it up for sale. You might ask a real estate lawyer about this showing them a copy of this article and your contracts.
  • May 09 2011
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Unfortunately, they sometimes can. Usually there are addendums that you have to sign as part of the contract package that gives them the ability to terminate the listing on certain grounds. Make sure you contact your attorney and have them look it over - this is actually in the realm of law and you need an attorney to give you the skinny. If it can be canceled, your best bet would be to have your agent try and play nice-nice with the listing agent and request notification that the home has been re-activated before the agent puts the listing into the MLS. Your mileage may vary on this but it's what I would do.
  • May 09 2011
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Lisa, 
They very likely have the right and opportunity to cancel the agreement.  Is probably in a contract addendum.  Additionally, even if they did not have the right, the amount of effort that it would take for you to "force" them to comply is incredibly taxing.

I always see the glass half full... think about it - is better to have found the irregularities on the title now, and not after you moved into the house and you are facing title problems and litigation...

There are plenty of homes on the market, you will find a similar one or even a better one... this is a buyer's market... be patient and persevere...
  • May 09 2011
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Did you read your contract with them carefully?  Everything is explained in your contract; and I'm certain that it gives them the ability to terminate as they see fit.  It's unfair, I agree, but that's the way they work.
  • May 09 2011
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