The most convuluted real estate problem ever please help

[whizzif]

Greetings all. Well, I secured a construction loan with my credit to build a house. The house is 90% complete and I'm the one that finds out that it is on the wrong lot. The lot doesn't even belong to the builder. It belongs to the developer. There are liens against the property because the builder hasn't paid people and he's setting up for bankruptcy I'm sure...he's not contacting me or the bank.

The bank is all up in arms because if they foreclose, they foreclose on a 300K piece of dirt. They hired the inspector and approved the foundation survey, etc. I had nothing to do with doling out money to the builder or anything to do with ordering inspections, hiring inspectors, etc.

Isn't the bank liable for this screw up? I don't want to waste money on lawyers going after the builder because he has no money -- I won't get anything -- I believe the bank should go after the inspector because he has insurance for this kind of stuff and I should be released from my agreement since they didn't do their due diligence.

Thoughts? I need all the advise I can get. Basically at this point, I'm not going to make any more payments and I'm going to see what they do and what they send me. Any ideas how they will proceed?

Thanks so much.

[whizzif]

By the way, I live in VA and the house is in SC. The bank is in Maryland....

[emoney]

Sir, now is the time to engage a good real estate lawyer, and not depend on what persons you will never meet on a website think.
regards,
emoney

[lrprn]

Isn't the bank liable for this screw up? I don't want to waste money on lawyers going after the builder because he has no money -- I won't get anything -- I believe the bank should go after the inspector because he has insurance for this kind of stuff and I should be released from my agreement since they didn't do their due diligence.

This is NOT the time to make any assumptions. Get yourself to an experienced real estate lawyer NOW and find out where you stand before you stop making payments. What may seem very logical to you may not be logical at all when seen through a judge's eyes. Get going!

[HHM]

Yeah, not much we can really do or say to help, to even have a shot at giving you some "guesses" about what course of action to take, we would need significantly more background.

You need to spend the money to at least consult with a real estate/construction attorney. You have multiple issues to discuss, but as for who is responsible for what, it seems like the operative legal question is, "who had responsibility for lot designation". If I had to guess, I don't think it will be the bank and I think the inspector is questionable as well...after all, the inspectors are just there to inspect the quality of construction and make sure it is to code, they could care less whether the structure is on the correct lot. Unfortunately for you, the responsibility will probably fall to the builder or yourself.

I would be hesitant about stiffing the bank just yet until you know where you stand, odds are, you will be held personally liable for the entire amount of the note...this is a construction loan, not a mortgage...although the bank has the right to foreclose and complete construction, you are on the hook for any deficiency.

Also, never assume a builder is bankrupt or going bankrupt, also, the builder is probably bonded as well, so your first course of action is to make a claim against the builders bond.

[whizzif]

Thanks. I met with an atty Wed. He thought I should try to come to some agreement with the builder/bank to work everything out. The problem is, the builder isn't communicating -- he's pulling this scam on more than just me -- he's stolen money and misappropriated funds because there are liens on the property.

The bank hires an inspector and gets a survey when the footers are in place to ensure that yes, this foundation is on the right lot. I have nothing to do with that. I'm in VA and according to everyone for the past year, everything is moving along. Then I start getting, "oh just waiting on such and such, should transition to a mortgage in 30 days" -- I've gotten that 3 times from the bank. I drive down to check on things because I'm getting uncomfortable and the builder isn't returning calls -- only to find out that all of the paperwork is hosed and the house is on the wrong lot.

I even have an email from the banker after I raised the concern saying that he checked into everything and everything seemed to be in order.

How can I be held liable for this mistake? That just doesn't make any sense.

So, a judge would rule against me? I'm an upstanding citizen who pays his taxes and hasn't made a late payment on anything in his life and never been in any debt in his life -- trying to do the right thing vs. this scum bag who has stolen money and defrauded people and not paying bills and running -- he's been in and out of court, had a judgement against him in Maryland for 82K over something, in the middle of divorce proceedings -- total con artist with 20+ credi cards and business names not paying taxes and defrauding the gov't -- ??? How the F$%# excuse my french can this happen?
Aren't there laws to protect people like me from people like him?

The lawyers I'm calling in VA to seek counsel are telling me I need to take it up with the lawyers in SC. He's busy and isn't returning my calls. At this point I don't trust anyone or any lawyer because for all I know, they could be with this scum bag --

Any thoughts?
Thanks so much for any input. I appreciate it.

[whizzif]

Does anyone know what the laws are as far as moving out of the country? I may have a job opportunity and could just let all of this blow over for the next 10 years. Is that an option? Or would I have to renounce my citizenship? My girlfriend is Canadian. If it were something I did, I would own up to it but I feel totally taken advantage of and I'm not going to let this ruin my life.
Thoughts?

[One Half Full]

Does anyone know what the laws are as far as moving out of the country? I may have a job opportunity and could just let all of this blow over for the next 10 years. Is that an option? Or would I have to renounce my citizenship? My girlfriend is Canadian. If it were something I did, I would own up to it but I feel totally taken advantage of and I'm not going to let this ruin my life.
Thoughts?

I know a lot of Americans who live and work in other countries. You dont need to renounce your citizen ship. I think you need a lot of paperwork, and you need to "visit" America once a year. Dosent have to be for long, just long enough to get your passport stamped. -- I dont know if it will solve your problem.

Who registered your lot address? They are the ones in the wrong. I think you should go to "several" Real estate lawyers and get several opinions.

[whizzif]

Yeah, that was a desperation post. This is just so screwed up because my builder has scuttled and won't return calls -- he hasn't paid the subs and they are starting to file suits. The garage door people came and ripped out the doors -- it's a mess. And it's not even my house because it's not even on the right lot. The bank hired the inspector to make sure this was right. I can't see how I'm in the wrong. I am going to meet with a good real estate atty. The bank is in one state and the house is in another so I'm going with an atty in the same state as the bank because I think it's the bank's problem.
Does anyone know -- can the bank come after cash in my bank account? It's not much but it's all I have right now. According to a lawyer in the SC (where the house is) -- they can't garnish wages unless for spousal/child support. I am working in VA and have been since the beginning -- what's the deal on that? I don't want all of this getting to my HR dept. That'll just make things even worse......and I didn't even do anything wrong. I have no debt at all, no credit card debt, no car payment -- nothing. I got taken on a house that the bank screwed up on and now I may face having my wages garnished for life -- please someone tell me how I can escape this nightmare.
Thanks

[HHM]

We'll have to see what the attorney says....unfortunately, I think the bulk of the blame will fall to the builder and if the builder has disappeared, then you are probably SOL.

Like I said, you really need to get a claim on the builders bonds (that is what the subs are doing), so you need to get a place in line on that bond ASAP.

[whizzif]

I'd have to do that with an atty in SC where the house is or can I do that in Maryland where the bank is and where is company is registered.
He's registered as a builder in SC. This just so confusing. How can I be SOL if it's the builder's fault. That's like going to get your car worked on and coming back and the repair people saying, sorry, we can't really find your car so go buy another one. ?? Geez.

Who do I need to call?
What about just filing BK now, inviting the bank to the hearing and the judge would hear the story and how the bank screwed up everything and now it's my fault? At least it would let me get on with my life. It's a shame because I have perfect credit and have never had any debt in my life and have never made a late payment on anything. I can hang out for 5 years and I don't have any assets except cash in the bank -
Thoughts?

[whizzif]

I'm thinking about contacting the FDIC to see if they'd like to take a sniff around the bank -- I doubt the bank wants this to get out. This is bad press and they could potentially lose their charter for this sort of thing right? At least, that's what I've been reading on some sites but I'm a layman when it comes to this stuff.
I just need to get on with my life and stop worrying about this stuff. Life is too precious and I've done nothing wrong -- I know how to manage my finances -- the bank should fix their screw up and let me move on.

[HHM]

I'm thinking about contacting the FDIC to see if they'd like to take a sniff around the bank -- I doubt the bank wants this to get out. This is bad press and they could potentially lose their charter for this sort of thing right? At least, that's what I've been reading on some sites but I'm a layman when it comes to this stuff.
I just need to get on with my life and stop worrying about this stuff. Life is too precious and I've done nothing wrong -- I know how to manage my finances -- the bank should fix their screw up and let me move on.

Ok, you need to calm down a little (I know that is hard, but you must). Your mind is wandering into crazy town

You are meeting with an attorney soon and will hopefully get some answers. Unfortunately, many of those answers will likely cost you money in order to pursue resolution of this issue.

I only say you are SOL with regards to the builder based on your representation that the builder has vanished (they probably have not completely vanished). But, your subsequent post raises more issues, was this builder a licensed contractor in the state where the house was being built?

The bond would be in the state where the contruction was being done.

http://www.llr.state.sc.us/POL/Contractors/

I hope I am wrong, but I have a sense you are mis-placing the blame on the bank. I understand your urge to put blame on the bank because they seem to be the only party still around (if the builder has really vanished), but it would be very odd for the bank to be assigned liability in this instance.

In construction cases, you have (1) owner, (2) general contractor, (3) subcontractors, (4) insurance companies, (5) the lender, (6) inspectors, and (7) architects (sometimes).

So, among those parties, who is at fault? Also, who is the actual owner of the lot where the house was improperly placed. Are the lots fairly uniform and interchangeable, or is there some uniqueness to the various lots. Basically, this is a mess, and I doubt resolution will come quickly. But I think you would be jumping the gun on filing BK, there is no reason to at this point.

[whizzif]

Thank you very much for your inputs.

I checked and he is listed as a board member on the site you posted. Does that mean he's bonded? Is this something that expires?

The lot actually belongs to the developer -- and yes the lots are similar but I don't want the other lot where the house is. There are liens already on the house because he hasn't paid the subs. I guess I need to get a lawyer in SC to file a liens pendis to get in line on his bond?

Do I need to be at court for that or can my lawyer represent me?
I'm just trying not to lose my job over all of this because it's consuming my time and energy.
How can I be liable for something I had no part of -- the foundation survey, the hiring of the inspector.

Another interesting fact -- the copy of the sales contract I walked away with from closing has one lot number. The copy I recently picked up (signed copies) from the closing atty has the lot number scratched out with no initials or date next to the "correction." -- and it looks like she may have doctored things or something. The crazy thing is that the house isn't even on either of those -- it's on a completely separate lot (right next to the one that got sold to me). She did not reform the deed when this happened I guess (whatever that means) -- and the bank is a little curious there. Would her E.O ins cover this screw up? Also, the inspector has E.O ins - I just don't know. I just can't see how I am liable for all of this -

[HHM]

You are not going to be liable...but I am not sure there is an easy resolution here.

The problem is, this situation will take time to sort out. If you hire an attorney, the attorney would basically handle this for you. You would not really have to do anything except deal with your attorney.