Bank Foreclosed - How to Handle SBA Disaster Loan?

[southernguy]

What is the name of your state (only U.S. law)? Mississippi

After Hurricane Katrina my wife and I purchased a flooded house to rebuild and use as our primary residence. We secured a construction loan at our local bank for 190k. We also qualified for a 40k personal property SBA loan that we had modified to use for rebuilding the house, instead of replacing personal items.

When we were ready to convert to a mortgage the local bank refused to do it. They demanded the construction loan paid in full or else they would foreclose. We tried to sell the house and get another company to fund the mortgage, but in the end the bank repossessed the property. The house has since sold.

I left a voicemail for the attorney at SBA explaining what happened. We haven't heard from them until now. We just got a letter saying that we now owe 50k because of fees, etc.

I realize that we signed for the loan, but shouldn't they go after the money from the bank who sold the property? Does the lien carry over to the new buyers?

Any advice on how to proceed with SBA would be greatly appreciated!

[HomeGuru]

Originally Posted by southernguy

What is the name of your state (only U.S. law)? Mississippi

After Hurricane Katrina my wife and I purchased a flooded house to rebuild and use as our primary residence. We secured a construction loan at our local bank for 190k. We also qualified for a 40k personal property SBA loan that we had modified to use for rebuilding the house, instead of replacing personal items.

When we were ready to convert to a mortgage the local bank refused to do it. They demanded the construction loan paid in full or else they would foreclose. We tried to sell the house and get another company to fund the mortgage, but in the end the bank repossessed the property. The house has since sold.

I left a voicemail for the attorney at SBA explaining what happened. We haven't heard from them until now. We just got a letter saying that we now owe 50k because of fees, etc.

I realize that we signed for the loan, but shouldn't they go after the money from the bank who sold the property? Does the lien carry over to the new buyers?

Any advice on how to proceed with SBA would be greatly appreciated!

**A: you owe the money.

[southernguy]

Thanks for clearing that up. I'll just write them a check. And I'll be happy to send you one too for your thoughtful, and tremendously helpful response.

Have a great day.

[HomeGuru]

Originally Posted by southernguy

Thanks for clearing that up. I'll just write them a check. And I'll be happy to send you one too for your thoughtful, and tremendously helpful response.

Have a great day.

**A: please make the check out to Advice Company.