foreclosure on a house for sale by buyer

[overtgabby]

What is the name of your state? CO

My freind was buying 40 acres.. with a house for 80,000, directly from the owner(no bank involved) Everything was fine untill the house burned down. They are now renting. They paid the mortgage for 2 months.. untill the insurance came through. The insurance did not cover the remainder of the mortgage or replacement of the house.. so they are still renting.. over a year later.. They do not have a downpayment to replace the house. The landlord told them that they didnt have to worry about the rest of his pay until they got a loan.(25000) This is not in writing.. it was a verbal agreement.
I am trying to buy this property from my freind , because it has become a hassle for him.. He cannot afford a loan and rent too. All the paperwork is done.. just need to sign papers.. and Now the owner has filed foreclosure on him. What rights do Both of us have in this situation? I already paid for the appraisal fee. I did not know the property would be in forclosure when I started the process(neither did he) seems creepy that forclosure papers arrive right when im about to get my loan to give my friend the money to pay the owner.. He has tried to contact the owner for a good 3 weeks previous to getting the papers. Please advise

 

[lcannister]

The landlord told them that they didnt have to worry about the rest of his pay until they got a loan.(25000) This is not in writing.. it was a verbal agreement.

Then don't be surprised when your friend gets a nice letter demanding the 25K owed to the LL/owner, I can decide which from your post. Should be in writing!!!!!

What rights do Both of us have in this situation? I already paid for the appraisal fee.

YOU, none and as for the friend that can not be determined without seem all the contracts signed at purchase. He has the protection of a proper foreclosure.

Please advise

YOU contact the owner and see if he will sell accept the terms of the sell from you friend and proceed ONLY with the help of Legal Counsel or you could lose big time.

 

[ADBunting]

So if the insurance didn't cover the replacement or mortgage...

What DID it cover? What's left? <uh...the air is still there...?>

I am going through a situation where the idiot I'm supposedly purchasing this place from is complaining I didn't get insurance for the balance of the loan BUT insurance agencies (at least here, I'm in Nevada) won't insure for the entire balance of the loan. Only replacement costs of structures. Land doesn't go anywhere and buildings are ... well...can burn down. It's the buyers responsibility to make certain they take out sufficient insurance to cover stuff like personal items and the structures.

Some major financial institutions require insurance for the balance of the mortgage to obtain a loan but insurance agencies also state that you're just throwing the money away on the extra coverage because they STILL won't pay more than the replacement costs of the buildings. Maybe in the rare event that it's built on a cliff during mud season in California...but I'd also bet dollars to doughnuts that they won't insure something like that in the first place. (unless you are rich and live in Malibu)

So, like I said, exactly what did the insurance cover? What was your friends down payment and what kind of agreement did they have. Was ANYthing in writing?

April

 

[overtgabby]

The insurance covered the house only, I imagine.. the owner carried the insurance. Im sure the original agrement is in writing.. but Im not sure of the terms.. I am waiting for him to hear back from his Lawyer. He only got the papers on Friday.. and this being Easter wekend.. Im sure the Lawyer isnt working this wekend. Probably will hear something on Monday. When the house burned down, they agreed verbally that he could pay the balance when he got a loan.
There is still air there!

 

[nextwife]

So WHAT actual "ownership" does your friend have? Sounds like he's a tenant.