Bank reposessed house mid contract

**ozmonday** · 11-17-2010, 08:57 PM

Not sure if the topic title applies but here goes

Living in Australia but hopefully the laws transferr internationally or an Aussie reads this and has an answer

We found a house we liked and put in an offer which was accepted subject to finance.

Between us signing a contract of sale and the settlement date the owner defaulted on their mortgage and their bank took possession of the property.

The bank are now refusing to sell it to us even though we have finance and have done all our paperwork we are ready to go so to speak..

The amount we have purchased the property for in the contract is $8000 less than what the bank say they are owed..

They have agreed to let us move into the property and pay weekly rent until settlement.. however they will not give us a date when they will settle nor will they guarantee that they will settle with us ..

Are we likely to still be sold the property or are the bank going to screw us over.. are they just trying to squeeze that last 8k out of us in rent then sell us the house... ??

Any thought opinions or similar stories with conclusions would be greatly appreciated...

**Greg** · 11-18-2010, 05:57 AM

Don't believe anything the bank says unless you get it in writing.

There is a good chance this house will be sold as a foreclosure to the highest/strongest bidder. If you are living there and someone else buys it you will have to move out.

**ozmonday** · 11-18-2010, 04:36 PM

thing is we signed a contract of sale BEFORE the bank repossessed it off the owner...

as far as we are concerned we still have a legit contract and should be sold the property at the price we negotiated prior to the bank taking it they havent taken it from us .. but they seem reluctant to give it to us as well..

the amount we are paying for it is $8000 less than what is owed..

**Greg** · 11-19-2010, 05:03 AM

You have a contract with someone who doesn't own the house anymore. Your contract is no longer valid.

The bank did not take the house from you because you never owned it. They took it from the seller and now the seller can not honor their end of the contract.

It is up to the new owner as to what happens to the property. They might sell it to you or they might try it on the open market.

You need to get a new contract with the bank to buy the house.

**ozmonday** · 11-19-2010, 08:19 PM

since OP I have been told that the bank never "took possession" they initiated but stalled when they found out it was under contract.. if it wasnt under contract to us they would have taken complete possession.. im not sure how it all works.. but i know we are still dealing with the original owner and his solicitor..

we have been told that the person we have the contract with is still willing to sell to us and wants to honour the contract. its going tp be better for him in the long term.. we still dont know if we will be the eventual owners of the house..

**Greg** · 11-20-2010, 10:59 AM

make sure you have your very own solicitor look over all this.

**Jonathan Radford** · 12-30-2010, 06:55 AM

First you need to find out, at this point, who the legal owner of the house is. If the bank took over ownership of the house, then the (previous) owner no longer has any rights to the property, and therefore cannot transfer ownership to you. It's possible that the owner spoke to the bank and told them of the pending sale, and the bank extended the foreclosure to allow the sale to go through. You should speak to the bank, and probably a lawyer.