foreclosure/owner finance question

**freebs** · 07-22-2008, 05:01 PM

I don't know if i posted this in the right place and if anyone has had any experience in this.

I have a home that i owner financed, i drew up a contract for her and everything was signed and notarized. No deeds were changed at all in this transaction as the deed would not be changed until pay off. Now she is 2 months behind on payments and has moved out. Now i have some people interested in buying the home, do i have to foreclose since it wasn't in her name and she abandoned the property?? I am having trouble finding info online.

**FrugalMomof3** · 07-22-2008, 05:08 PM

I am not sure how this would work since you didnt not have a deed drawn up in her name, however I did find this article that seemed pretty good.

http://ezinearticles.com/?How-Does-O...ork?&id=686452

"In order to protect themselves, some homeowners require that the buyer make their monthly payments into an escrow account held by a bank or other lending institution, and they require the borrower to place a Quit Claim Deed into the escrow account with instructions that if a payment is late by a certain number of days then the escrow officer will automatically file the Quit Claim Deed, restoring the house to the former owner instantly.

If this were to happen the buyer would not only lose title to the property but would also lose any and all payments already made on the property. This is a powerful incentive for the buyer to make all payments in a timely manner."

With the knowledge I have learned since she did sign a contract but you HAVE NOT put the deed in her name and has failed to make 2 monthly payments, she is forfeiting all rights to the property. If I may ask, what did the contract you wrote up say in terms of defaulting on payments?

**tbs727** · 07-22-2008, 06:00 PM

It sounds like you need to take your papers to a real estate lawyer. I wouldn't risk doing anything until I talked to someone who knows the law.

**freebs** · 07-22-2008, 06:21 PM

My parents have the contract as it was their home. My parents cannot afford a lawyer so i know that is out of the question. Also i know that i called the court house today and just to file a foreclosure it is $270! I did find out that if it was foreclosed on she could not come back to try to pay off the note after foreclosure as that is not offered in the state of Texas.

**Michelle68** · 07-22-2008, 06:33 PM

Originally Posted by tbs727

It sounds like you need to take your papers to a real estate lawyer. I wouldn't risk doing anything until I talked to someone who knows the law.

--Michelle

**Michelle68** · 07-22-2008, 06:37 PM

Oops! I hadn't read your post regarding your parents not being able to afford a lawyer. Perhaps they could at least find a lawyer who offers a free initial consultation just to get an idea of where they stand with this. Good luck!

--Michelle

**Wendy99** · 07-22-2008, 08:49 PM

wow ... i agree legal advice is needed & hopefully they can find some for free?? I wouldnt mess around too much without getting legal advice of some sort .. could end up costing a lot more in the end if they dont ... best of luck & curious to know what the answer is to this

**Greebo** · 07-22-2008, 08:50 PM

Get a lawyer.

Now.

**Mom23boys** · 07-23-2008, 11:57 AM

I would also suggest getting a lawyer - someone who knows real estate laws. Otherwise, you may end up with a big mess!

**cottageliving** · 08-02-2008, 07:26 PM

There should be a legal aid society or something like it for people like your parents who do not have a large income.

Good luck -- the foreclosure process varies from state to state, so please meet with someone with RE Law experience in TX.