Can a mortgage lender foreclose after agreeing to a short sale in which an offer was made?

Get Legal Help Today

 Secured with SHA-256 Encryption

Can a mortgage lender foreclose after agreeing to a short sale in which an offer was made?

My lender started the foreclosure process but through negotiations with my Realtor and myself they agreed to a short sale. We received several offers, some were reasonable, some were not. Long story short the lender agreed to the final offer of $105,000 but they dragged their feet when it came to doing the paperwork. We did everything that was asked on our end including earnest money from the buyer, but yet they still foreclosed my property. Now they’re selling the home for $105,000. Is this legal?

Asked on May 13, 2011 under Real Estate Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no simple answer. IF there was a firm agreement that they'd accept the short sale, and if you and the buyer both honored all obligations and met all relevat criteria and requirements (e.g. as to credit worthiness; as to down paymenet; etc.), then the bank should have been obligated to honor that agreement and not foreclose. But at several points, matters could have fallen through, such as if the bank's offer was not firm (e.g. had caveats or restrictions, or was just in the initial process of discussion, but had not been agreed to); if you or the buyer tried to change any of the terms or did not accept the offer as is; if there were any problems with the buyer's eligibility for the purchase, etc. You should bring all documentation and correspondence to a real estate attorney who can evaluate the specific situation in detail for you.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption