a house has a contract but bank will not let it close-still sending to foreclosure...WHY?

My client has a contract on a house and it is scheduled to close (oct. 25th) before the foreclosure date (nov. 8th) but the bank will not accept the contact. They are going to have the house auctioned off instead (and the property may sell for less than the contract price). Why would they do this? Thanks.
  • October 13 2010 - Nashville
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Answers (5)

Ah,,,that said it all... without being able to get all lien holders in agreement, the bank really has no recourse but to foreclose.... You'd think the two lien holders would understand that and realize that something is better than nothing!  Hope you're able to find your buyers a different property.
Best wishes,
Tina
  • October 19 2010
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No its not a short sale. The property has 4 liens on it and the bank cannot get two of the lien holders to agree on a payoff amount...so I think they have decided it would be easiest to go ahead and foreclose on the properties (there is another property that has not sold yet involved). The bank is Bank of Nashville. Thanks so much for your help.
  • October 19 2010
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First question to you is, was the contract between seller and buyer a "short sale" which is contingent upon third party approval?  If so, you need to get in touch with the asset manager and have them accept/counter/deny formally the contract (they are required to respond to a valid contract) OR, if they are planning on accepting, have them put a STAY OF FORECLOSURE SALE on the property.  The lender is responsible for letting their foreclosure department know that there is a contract on the house which may be approved under short sale status and to stay the foreclosure.  It also depends on who the lending institution is as well.  Without naming any specific companies, there are a few big ones currently going through major lawsuits and many contracts are falling through the cracks due to insufficient/inadequate workers to handle the influx.  You really need to get on the phone and be relentless to get an answer.....
  • October 19 2010
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I would be so proactive ..  I'm for sure not saying that I have the answers but for what it is worth. . .
If at all possible I'd call the asset manager.  I'd tell them I want to make a formal record of our conversation and say "I'm writing down the date and the time, now what is your name, phone number, fax number, email and title."  I'd get their explanation and repeat it back to them and then send them a written document of our conversation.  Sometimes, with luck that puts them on enough notice and they might rethink it or be concerned for the ramifications.
Again, just my 2 cents for what it is worth. 
Sincerely,
Celia
 
  • October 14 2010
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Profile picture for JarydRuffner
Find out why they won't accept it. They usually will tell you if you have authorization on the account to speak on behalf of the borrower. My experience is that they will usally review it unless the offer is for less than what the opening bid at auction will be. You need to find out what their reason for denial is.
  • October 13 2010
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