Should Buying A Home Be This Hard? — Part IIIby Tim Manni
Here is the last chapter in this saga. Unfortunately for the couple who wrote this first-hand experience, their latest snag in the home-buying process remains unresolved, leaving their fifth offer to remain in limbo.
This latest twist that has prevented the couple from closing on their home is a scenario called “post-foreclosure bankruptcy”:
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.
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.
The waiting had just begun. The “post-foreclosure bankruptcy” could wind up costing the couple their chance at owning the home they’ve chosen. Beyond inconvenience, these types of delays can really begin to impact homebuyers as they prepare for life in a new town (emphasis added):
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.
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?
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.
As we wrote above, the couple’s closing remains in limbo. Has anyone else experienced delays like this as you prepare to close on a home?
In case you missed them: