Blaise:
The courts will typically look at the following issues;
WHO drafted the land contract ?
WHO was responsible for closing the transaction and recording the documents?
What did the original sales contract between the parties state with regards to the seller financed terms?
Is there any language in the sales contract that states that the sale contract “shall survive closing”, etc.?
Was their some sort of compliance, errors & ommissions, etc. agreement executed by the parties involved at the time of closing?
Clearly you have an inherrent dispute involved here in what your L/C holder is stating, and what your debtor on the contract is saying. Litigation is always expensive, can be time consuming, and often is a “crapshoot” as to what the outcome will be.
If I were to buy the contract I would buy in on the basis that the L/C maturity date is the WORST CASE Scenario. Your L/C seller is trying to sell you “damage goods” here, so price your investment accordingly.
Discounted Land Contract with Fraud. - Posted by Blaise Dietz
Posted by Blaise Dietz on June 19, 2001 at 14:02:08:
A local gentleman was referred to me by a guy from FNAC and here is the deal. Balance of LC is 28,950 @ 7% interest. Will sell for 20,000. Payments were amortized over 30 and a balloon due in seven. That Balloon is due next month.
The homeowner was contacted by the LC holder to remind him the LC balloon was due. The homeowner told the LC holder to check the paperwork and that it read, balloon due in 2009 not 2001. LC holder checks LC agreement that he drew up and saw that this buyer put a circle on top of the 2001 to read 2009 and it is definately, obviously, scribble over the 1. The LC also has the word “seven” written next to the altered date. I have seen the LC and this buyer pulled a fast one the mature gentlman who was doing him a favor. He sent me a copy of the Land Contract and Warranty Deed. It looks a feels legit from the LC holders side. Any ideas on how the courts will deal with this fraud. If it made sense, I have the energy to go through the legal work if it won’t take half a decade to get done because 7% is no fun. I am new to this part of the business. I run a Mortgage Bank in Michigan. All Advice is greatly appreciated!