Bought home Contract for deed, seller filed bankrupt, house being forclosed on??

[judgedbyall]

What is the name of your state?Minnesota. My friend bought a house contract for deed about two years ago. A couple of months ago the seller of the house called and told him that he was filing for bankruptcy and that the house was being forclosed on? The seller told him to get a hold of the bank that the mortgage was through and talk to them. I guess there was some kind of deal made that my friend sent his house payments to the seller and then the seller was supposed to be paying the bank every month. The seller had made hardly any payments. He's going to lose his home unless he comes up with what the house is worth. How can they do this since he was not the one defaulting on payments??? He was also told that he'll then have to make an offer to the seller for the house? Why wouldn't he just pay the bank? Since the seller is the one who defaulted.

 

[HomeGuru]

What is the name of your state?Minnesota. My friend bought a house contract for deed about two years ago. A couple of months ago the seller of the house called and told him that he was filing for bankruptcy and that the house was being forclosed on? The seller told him to get a hold of the bank that the mortgage was through and talk to them. I guess there was some kind of deal made that my friend sent his house payments to the seller and then the seller was supposed to be paying the bank every month. The seller had made hardly any payments. He's going to lose his home unless he comes up with what the house is worth. How can they do this since he was not the one defaulting on payments???

**A: because of the system whereby the bank has first mortgage position.

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He was also told that he'll then have to make an offer to the seller for the house?

**A: that's correct.
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Why wouldn't he just pay the bank? Since the seller is the one who defaulted.

**A: because he is following the contract and failed to do things correctly like use a collection account. Just hope the seller did not use the property and put another mortgage on it or have liens filed.

 

[judgedbyall]

**A: because he is following the contract and failed to do things correctly like use a collection account. Just hope the seller did not use the property and put another mortgage on it or have liens filed.

So shouldn't the real estate agent that got the two of them together have told my friend the correct way of doing things. I was told that the agent was very involved in the whole thing??? I'll have to talk to him (my friend) again and make sure I have everything correct.