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Closing and foreclosure?

I finally sold (closed) on my home on 10/27/11 after 11 extensions (original closing date was 8/12/11). I moved out 8/1/11 after being told everything was fine with the sale. It wasn't. I wasn't able to pay my mortgage for August, September or October... but was in contact with my mortgage lender weekly. Well, on 10/31/11 my mortgage lender filed foreclosure! How can they do that 4 days after I sold the home? The closing company did a title search (obviously!) and nothing came back on the home (no liens, etc.) However, my mortgage lender insists the house is in foreclosure effective 10/31/11. How can they? I no longer own the home and haven't since 10/27/11!
  • November 02 2011 - Spring Hill
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Answers (1)

Look at it from your mortgage company's perspective and your contract. The seller is liable for anything physical and any financial responsibilities until the day of closing. Taxes , mortgage payments and , utilities (sewer and water) are prorated until the day of closing.
A pending contract does not stop the obligations. Did they send you notice of default and notice of sell letters?
That really makes no sense on your lender's behalf because they are going to get paid from the settlement proceeds.
What did the title company say and what type of notice did the buyer receive? Title insurance should cover this  and the lenders may reconcile this between themselves.
  • November 02 2011
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