Question on REPC's and Leins

[Mattown]

What is the name of your state? Utah


My Mother lives in Utah and is in a situation at the moment. I don't have concrete information from her but I'm worried. This is the predicament.

She was working with a developer who basically tried to swindle her. She is a real estate agent and was selling homes from a builder. This particular builder offered her a REPC (real estate purchase contract) that essentially gives her the right to buy the home, although not assume full title unless she buys in full (is this right?). It just so happens that the cost of the home in the REPC is substantially lower than what the home was appraised for. The difference is basically 400,000~ish in the REPC with an appraised value of 1.2 Million.

Now apparently the landlord without my mothers knowhow, took out a massive equity loan on the house so if my mother tries to buy the home now she apparently assumes the equity responsibilities . To make matters worse the builder owes my mother $198,000 in commissions from the homes that she sold for him, which by the way, the court system has ordered him to pay but unfortunately he hasn't because he is apparently bankrupt. My mother does live in the house on a rental agrement with the builder. The builder deducts the rent fees from what he owes her.

Now, common sense dictates to me that he has to foreclose since he is "bankrupt" and cannot pay my mother the commissions that he owes her. It has taken a long time for him to foreclose on the home equity loan and several liens have been placed on the property, my mother included, who is 3rd in line.

Despite the liens, to the best of my knowledge the REPC overrules any lien that would take title of the property.

So really, my first question is does my understanding make sense? I basically was told this over the phone tonight and I've rushed to understand the legalities over the internet. 2nd, what can my mother do regarding the owner and obtaining the home for the low REPC price. My mother said that if the owner forecloses on the home equity loan, which he has eventually, since apparently he can't pay her what he owes her in commissions, then she can assume to purchase the house at the lower rate without assuming the equity burdens. Is this legally possible? I'm guessing the greasy builder is delaying filing for bankruptcy somehow...ugh

Any helpful advice would be great at the moment. My mother can't afford an attorney and is in a dire situation. To make matters even worse for her she basically has zero assets and $$ because she just got out of a divorce from a 30 year marriage to which she gets little alimony. Not to mention my dad left her for her best friend...Anyways, I'm guessing that there has to be some sort of legal document or law that my mom could take advantage of to somehow maybe either deduct what the owner owes her from the REPC or work out some kind of agreement to pay her back what he owes her in the form of the house or some % to title.

Thanks, I'm just a 24 year old son trying to help crazy and messed up, broken upper middle class family, sigh..

[FlyingRon]

I've never seen a purchase contract that assumed that you would take on any liabilities incurred by the seller after it was signed. If the seller can't deliver free and clear title, that usually is a breach of the contract (your mom may even be able to recover damanges). Hopefully any money she gave him is in an escrow/trust account out side his constructive reach, otherwise if he does go bankrupt, she can kiss that money good bye.