Buyer’s Feet Stave off Foreclosure (for now)!

A client of mine just sold her house in North Carolina and moved to Nevada, just outside of Las Vegas.  As you probably know, Nevada is full of foreclosures and short sales.  So, naturally, my client contracted to buy a short sale.  During the escrow period (and during short sale negotiations with the lender), she and the seller agreed that she would be a tenant.  After all, who wants to move twice?

She and her husband moved in earlier this month, bought a new refrigerator and washer/dryer, and began unpacking. Yesterday, she called to tell me that someone from the short sale lender showed up to change the locks.  Because she was home, she was able to explain the situation, at which time the bank representative asked to photograph her feet.  Yep, that’s right…he told her that he needed to photograph her feet to have documentation that the home was occupied.  I hope she had gotten a pedicure!

But then the bank rep also proceeded to tell my friend that the bank would give her 30 days notice when she would have to vacate the premises, apparently in accordance with Nevada law.  As of yet, she hasn’t gotten that notice, but she is quite stressed that she will be forced to move out even though she has an offer into the lender and a lease agreement with the seller!

So, what’s the lesson here?  If you’re a buyer looking to buy a short sale, always inquire whether the seller has an attorney in place to handle foreclosure defense.  At most banks, the short sale and foreclosure departments don’t communicate, and so it’s a classic example of the left hand not knowing what the right hand is doing.

If you’re a seller, hire an attorney!  We say it all the time, and it remains true…you absolutely need an attorney to keep tabs on the foreclosure process.  Don’t assume that just because you have a short sale contract with a buyer that the foreclosure proceedings will stop!

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