 Foreclosure Drawbacks
This issue is related to a property in Melrose Park, Illinois.
I went into a Land Contract agreement for another person, let's call him Mr. P. This occurred in August of 2005 when I purchased a property on his behalf. This 2-unit property was purchased for $390,000. The terms of the agreement were that he was to pay me a $10,000 deposit and each month pay me PITI plus $200. When he was able to buy the property (he couldn't initially because of medical collections for an issue that I was told was corrected), he could do so and would have to pay me 2% of the value of the house per year. I thought it was a pretty good agreement and all went as planned for the first 3 months.
Then it turned out his wife became sick again (I think she may have actually died). Regardless, what this meant to him was that he couldn't pay me. I didn't get the full story until after I had made two full mortgage payments (approx, $3,500/month). I then came to find out that his brother, Mr. V, had been looking over the property. He had been collecting rent from the tenants in the building and not giving them to me! Mr. V also told these tenants that a new owner had bought the property and wanted them all to vacate! So now there are no tenants at this property either! At this time I found out I had to relocate out the country for a job assignment. So instead of dealing with this issue anymore, I decided to sell the prop and get rid of this headache. Turns out I bought the property overvalued. I probably would not be able to sell it at a price high enough to payoff the mortgages. It would also not be worth it to retain the property and rent it out. I further found out that I would actually need him to legally release the rights of the property to me before I could even sell it!
Well I'm considering employing the same lawyers that made the Land Contract for me to help end this nightmare. They have been telling me all the trouble and money it takes to go through all the legal issues and now I'm considering whether it's worth going through with all this. My bottom line questions are: Should I go forward with the suit, which seems prohibitive by cost and may only result in minimal amount of damages I can collect or should I just stop paying the mortgage and let the mortgage companies deal with this property by foreclosing on it? What are the repercussions to me? Will I be liable for the difference of the amount the mortgage company is able to sell the house for and their mortgage amount? Could they go after my other assets? I know this will cause credit damage, but would there be judgment or collection for the difference? Any other issues that I should be aware of? | 
04-21-2006, 01:26 PM
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