Re: Buyer suing after 3 years - Posted by JohnBoy
Posted by JohnBoy on July 01, 2001 at 11:17:39:
Was the buyer required to refinance within a certain time frame to pay off any of the notes you or the seller agreed to carry back or did the buyer just take it upon themselves to get refinanced to pay you off?
It appears the buyer may have also recieved some cash out from refinancing. Is that correct?
Basically, what I’m understanding here is that the buyer obtained a new loan for 75% LTV when they purchased the property from you. You and the original seller had agreed to carry back some paper for the remaing equity. I assume the 1st seller carried a second and you carried a 3rd?
A 1 1/2 later after occupying and owning the property the buyer takes it upon themselves to get refinanced at which time they paid off the second held by the seller 1 and paid off the third held by you as seller 2. The buyer may have also put some cash back in their pocket from the refinancing they obtained?
The refinancing took place 1 1/2 years after they purchased the property from you. They filed suit against you 1 1/2 years after they obtained the refinancing?
You say the property recently sold for $7k less than what they purchased it from you for. The house sat on the market for 275 days before selling. This means the house would have been put on the market approx. 9 months after they obtained their refinancing. This would appear that they may have went into foreclosure right after they obtained the refinancing, appearing that they may have never made a payment on the new loan they obtained. That’s assuming the property was foreclosed on like you suspect.
What doesn’t make sense is that if the buyer felt they were ripped off by over paying on the property, WHY did they wait a 1 1/2 AFTER owning and living in it, WHY did they go out and obtain another loan for more money and pay off the second and third, WHY did they wait another 1 1/2 after THAT, to decide they over paid where you took advantage of them??? That doesn’t make any sense to me.
Did you have any part in the buyer getting refinanced or was this something they took upon themselves to do without you being involved in any way other than to furnish their lender with a pay off amount on the paper you were holding?
Assuming you weren’t involved with the refinancing part and/or had anything to do with the appraisal or appraisor, I don’t see where they would a case against you.
It doesn’t matter how much you sold them the property for, even if it was above market value. You can sell any property for any amount you and your buyer agree on, as long as there isn’t any fraud involved with deceiving the lender in any way for obtaining more financing against the property. There is no limit as to how much profit one can make on a property. As long as you had nothing to do with the appraisal where it was “inflated” to deceive the lender, or had anything to do with making false statements on any loan app. you should have nothing to worry about.
The fact that the buyer had refinanced and obtained a new appraisal through their own lender should clear you of any wrong doing from the first appraisal that was obtained since the second appraisal came in 33% higher than the one obtained when you sold the property. That would prove there was no foul play in regards to creating a phony second for the purpose of getting the lender to loan a higher dollar amount against the property.
Assuming you had nothing to do with the second appraisal done and weren’t involved with the refinancing in any way, I don’t see a case against you.
The problem is any one can sue any one for anything. Whether they have a legitimate case or not doesn’t matter. You need a GOOD attorney on this and I would seriously be looking at wanting to file a counter suit for frivolous to compensate for all the cost and anguish this has caused you.
It sounds like the buyer may have read something about all the flipping scams going on around the country and decided to target you as one of those scam artists that took advantaged of them because they couldn’t make the payments on their loan after they refinanced.
Up until they refinanced a 1 1/2 later, where they paying you and the seller on the notes during that time?