Baltimore homebuyer stuck in limbo
It's ended up a lot more complicated — and stressful — than she ever expected.
She and her fiancé made an offer on the home, in Baltimore's Mayfield neighborhood, in January. The lender, which had foreclosed on it several months earlier, accepted the $170,000 contract.
But the March 6 closing date came and went.
Hoffmann said she discovered from the title company — not the lender — that the home couldn't be sold because the title isn't clear. The home is tied up in the defaulted owner's bankruptcy case, she was told, and the lender needs to file a motion to allow the sale.
But the lender hasn't done so. Hoffmann has no idea if the new April 20 closing date will also come and go.
She's beside herself about the delays, uncertainty and lack of communication because she got all her ducks in a row to move by the end of February. She paid to service the furnace and hot water heater so the home could be de-winterized and inspected, a necessary step for closing. (The home's being sold as-is, putting the repair cost on her rather than the lender.) She packed her belongings; her fiancé moved his things into a storage unit. Worst of all, they both got out of their apartment leases.
She said they're lucky that the new tenant for her apartment agreed to let them stay through April.
"Here we are, inconvenienced in our personal lives, and now, inconveniencing complete strangers who were supposed to live in my apartment," Hoffmann said. "We are very uncertain that we will be able to move by the end of April."
I turned to Barry R. Glazer, broker for Century 21 Downtown in Baltimore, to see if this is the sort of hassle that buyers of foreclosures should brace for — and whether Hoffmann has any recourse. Glazer, an attorney, once owned a title company.
He said it's not uncommon for homeowners to file for bankruptcy right before their foreclosure auction, as his research shows the previous owner of the Mayfield house did.
That's part of the reason buying a foreclosure listed for sale shouldn't be quite the roller-coaster ride that buying at auction can be. Lenders aren't supposed to list a property until it's theirs, he said. That means not just taking it back at auction, but also having that ratified by the court.
Here's the real head-scratcher: The records show the court ratified the lender's repossession of the home Nov. 13. So it appears that the lender does own the home.
"It seems odd, to say the least," Glazer said. "It's clear that once it's ratified, ... whoever previously owned that property and defaulted has no more rights. So it was ratified. If it was ratified incorrectly, I would have thought they would have filed a motion in this [bankruptcy] case to strike that ratification. That was not done."
He added: "I would want to know more about this bankruptcy. I would get this information, if I was her."
I passed that along, and Hoffmann checked with her title company about the ratification. She said she was told it isn't valid while the home is caught up in the bankruptcy.
The law firm that handled the foreclosure is trying to get the lender to file a "lift stay" motion so the home can be sold. Hoffmann doesn't know why the lender hasn't done that already, other than corporate disarray.
"If our country has any hope of turning around this mortgage crisis, the banks that own the homes will need to do a better job of unloading their backlog," she wrote in an email.
Glazer said it depends on the contract, but "she may have legal rights against the bank."
Hoffmann would be happy if she and her fiancé could just move. "We're both running out of patience and energy to do this," she told me. "We went to [Rep.] John Sarbanes' office yesterday and said, 'Can you help us?' It's ridiculous that we have the money ... and they can't close on the deal."
Have any thoughts for Hoffmann? Comment away.
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