Dispatches from the home-buying front: Part III
Here's Part III of Arrabal's home-buying tale, the final dispatch -- thus far -- of a head-spinning experience:
Bankruptcy is ridiculous. Foreclosure is crazy. The state of Maryland is a little wacky.
One of the previous owners of the foreclosed home my girlfriend and I were trying to buy had filed for bankruptcy after he had been evicted from his house. In a few states (including Maryland, of course), the bankruptcy overrides the foreclosure and an automatic stay-put order is in place. At least, that's what the lawyers said.
No one had lived in the house for more than six months. No one lives there now. How could this happen? Why would they want this to happen?
The title agency said this was "routine" and would delay us seven to nine weeks. Instead of Dec. 11, we would close in February. Maybe.
A bankruptcy attorney would need to go to court to get a judge to lift the stay. File a motion, get it approved, sell the house.
We weighed our options. We could get out of the contract and get our earnest money deposit back, but we'd already sunk just shy of $1,000 into the inspection and appraisal, not to mention the time and effort in our five-offer search.
We waited. And waited. Finally, we contacted the title lawyer again.
There's a new problem, he said. The bankruptcy was actually finalized and closed sometime between the foreclosure proceedings and now. We're looking at another 12 to 14 week delay, he said. Let's try to close sometime in March, maybe April.
There's really no way to describe how we felt. First it was anger, then it was just questions and more questions running through our heads.
How could no one have noticed he filed for bankruptcy? Why does he get the house back after it had already been foreclosed? How did Wells Fargo list the house for sale when it knew it didn't even own the place yet? Is there anything we can do? What about our daycare spot? Where are we supposed to live until then?
Court records show that the foreclosure was ratified on Sept. 11. Recently, the foreclosure file was closed after the auditor's report was ratified and finalized.
Yet still, nothing is moving. We've written letters to Wells Fargo. We've written letters to the listing agent. We've called and e-mailed the title agency. As a previous Wonk reader did, we even wrote to our Congressman. Our agent is baffled. Her broker is baffled. Our lender is confused. If we wait any longer, we're going to need to re-do the entire loan application.
And so here we are. Waiting. And waiting. And waiting, and not really knowing what is going to happen next. The attorneys say they need to file two motions, one to re-open the bankruptcy and one to have the stay order lifted. For some reason, each will take about seven weeks.
I interact with many attorneys at my job. I've told them the story, and the answers have been surprising: Some say this makes no sense, others say it's plausible. One even said that this could only happen in Maryland because of screwy bankruptcy and foreclosure laws.
And yet, all that we can do is sit here and wait. And hope, and pray.
While we've waited, the four other homes have all closed.
Offer 1: Listed at $199,000. We offered $206,000 and asked for 3 percent seller help. They accepted an offer for $208,000 with 4 percent seller help. We were outbid by $140 net.
Offer 2: Listed at $198,000. We offered $206,000 and again asked for 3 percent seller help. They closed for $215,000 with 3 percent seller help. Outbid again.
Offer 3: Listed at $169,900. We offered $196,000 with 3 percent help. They took a cash offer for $165,000. They accepted almost $30,000 less so they wouldn't have to deal with an FHA loan.
Offer 4: Listed at $200,000. We offered $206,118 with 3 percent help. They accepted an offer for $219,000 with $10,000 help.
Offer 5: Listed at $174,900. We offered $206,000 with 3 percent seller help. Accepted. But in limbo.
Thanks very much, Peter, for sharing your experience. Anyone else stuck in a "post-foreclosure bankruptcy" situation?
And if you've got another sort of buying or selling story you'd like to share, please do -- email me at jamie.smith.hopkins(at)baltsun.com.