The most convuluted real estate problem ever please help

[whizzif]

wow, thanks for the information.

I just think the bank is in breach of contract and they need to take it up with the builder's insurance.

But the bank doesn't have a contract with the builder -- so how do they go after him? I'm so confused.

I just want to move on with life -- it's obviously the bank's fault. They can afford lawyers to go after the builder.

This just really sucks.
Thanks for all of the input though.

[FreshLikeADaisy]

Whizzif, you've gotten really good advice on this, I hope you heed it. If you don't spend the $$$ on a good attorney for yourself now, it may cost you thousands of times that on down the road when all the lawsuits are hitting the fan.

I know it's hard to swallow this reality and accept that it's on you to do something about a mess you personally never created, but there it is. The loan, the house, the contracts are all in your name. You, unfortunately, are the one who has to clean this up and keep it from getting worse... which it will, if you take no action at all. Right now, you have a chance to prevent a lot of it, but when the lawsuits start rolling in and your creditors start obtaining default judgements because you have not presented any defense, there is nothing left to do but pay up.

I suppose bk would solve part of it, but liens survive bk.

Even leaving the country isn't a solution: anyone who sues you can get a default judgement against you if you don't bother to show up and present a defense. Collections are increasingly taking place even across international borders. And if you are lucky enough to escape that, the fact is that you can still never come back to live: as soon as you came back and had either assets or income, your creditors with default judgements could easily begin garnishment/levy/seizure actions. If you have kids or other family that too is going to be hard. Leaving the country may postpone, may distance you emotionally, but it is no cure and really will make things worse, IMO. You need an atty, here and now.

Don't pick one out of the phone book, either: you can call the Bar Association in your state for a recommendation, or better yet, if you know ANY atty personally, ask him who HE would choose to handle his own complex real estate battle.

I wish you well... but even more than that, I wish you in a good real estate atty's office, pronto. Good luck!!!

[whizzif]

I wasn't trying to dispute any of what has been said. Thanks for all of the advise. I went to see an atty last week. I just wanted to do a little more research to see what my options were and to talk to a few more people.

In reading through the documents though it states that the advances especially the first one are based upon the bank getting a copy of the deed. I never got a foundation survey to try to line up all of the lot #s and make sure things were ok. I figured the bank had good process and knew how to do this. I'm not the expert. That's why I used a big bank. They blew smoke as well and admitted fault doling out draws without getting that last inspection and going off pure invoices.
I will file suit with the builder as soon as the atty calls me back. I left a message to do this today but I'm sure he's going to want a healthy retainer.
I just wish someone would negotiate with the bank for me. I just still cannot believe the bank isn't in the wrong here. The way the contracts are worded - it's so favored towards the bank -- they can screw up everything, give a contractor 10M bucks to build a shack and they come after me? And they hire the inspectors? Just insane. I'm really thinking about going to the press with all of this. I want everyone to know how the bank is treating me. If it was something I did, I would be able to handle it better. I just feel totally taken advantage of. And now, I may end up spending the rest of my life paying this stuff back and not getting to do the things I wanted to do all because of other people's mistakes. Unbelievable.

[JRScott]

It might still be the banks fault. As the contractor above said it might be to your advantage to have the lawyer sue them all, and then let them figure it out.

[whizzif]

Thanks. Yes, I am going after the builder and the closing agent and the inspector. I just wish the bank would help me out a little and just give me a "grace period" until things settle out.

But thanks again for your input. I just think I've been totally taken advantage of because the builder and the banker were fraternity brothers. Now the banker that originated my loan doesn't work there anymore. I think they're all in bed on this and I'm left holding the bag.
I've never built a house before so I just figured that the inspector and the bank would have straightened all that out. But we'll see what happens.

[whizzif]

The builder has a bond (supposedly) -- what is the process for going about making a claim?

I hired an atty -- very expensive but I did it. I could have bought a car for what he charged me. He's looking into everything, all of my paperwork, etc. Can I claim those fees on the builder's bond as well or ?

Let me know.
Thanks.

[whizzif]

wow, $12K? -- that won't even cover what the flooring people are owed.
He has to have more insurance than that. He told me he paid almost $12K for insurance just last year so I'd suspect his coverage is for more than what he paid.

He has made contact though -- and his story is that he had contracts for the 3 adjacent lots and that I was supposed to get the lot he built mine on. The other 2 contracts never closed - but the closing atty had those contracts at one point and the bank even admitted to me that on one of my original loan apps, that the correct lot number was assigned -- so it's just a matter of getting either the bank, builder, or closing atty to own up to the mistake and make things right. That is the hard part -- especially when they're all trying to cover their butt. I just hope they don't falsify documents. I'm very close to getting the feds involved though -- let them start digging around -- I'm sure the bank would love an audit on this deal. The loan originator at the bank was the builder's fraternity brother -- COLLUSION for sure.

Anyway, thanks for the reply - my atty is on the case -- $7500 just to take the case..ouch...so I'm hoping I can recoup those costs somehow since it wasnt' really my mistake.

[HHM]

Keep in mind, the "bond" and "insurance" are different things.

The bond is easier to go after because you don't have to sue anyone (usually), it is a matter of filing a claim with the state. The insurance is more robust, although you can sometimes file a claim against the insurance without filing a lawsuit, these construction disputes usually end-up with a suit being filed.

I am not sure what the "feds" are going to do for you. As harsh as it is, and as has already been pointed out, this is YOUR problem. Now, that doesn't mean it is your fault, but it will ultimately be YOUR responsibility to sort it out.

[whizzif]

This guy has totally misappropriated funds and spent the money on other things -- isn't that stealing? I'm finding out more about this guy as well -- he's been in and out of court for the past 2 years with claims, etc. He needs to be stopped. I can only afford so many lawyer hours. They are going to try and suck me dry. I feel like he was in collusion with the bank and the bank was in on this scheme and now I'm the one trying to sort it all out. If I go to the atty gen and the feds, they will most likely take the case because I doubt I'm the only one he's trying to screw.

[HHM]

Good luck with that...hopefully your attorney can talk some sense into you and bring you out of your delusions. I understand the frustration you are under, the situation you are in totally sux and there is no easy way out that isn't going to cost you more money.

As for the state or feds. The feds are a non-starter, this situation is purely local (i.e. within the bounds of state law)

Face reality for a second...its not like this guy took your money and did nothing, as you already said, he actually completed the house to about 70%...that is not fraud. The problem is deceptively simple, someone made a mistake about the lot (there is no fraud...how has anyone benefited from that mistake?). The problem is, there is no easy or ready solution because as you are already aware, who is really going to cough-up the doe to fix it. And honestly, that $7500 you paid that attorney will probably turn into $15,000+ before this is all sorted out.

Ultimately, someones insurance policy is going to cover this claim, but getting too it will probably take some time and money.

[whizzif]

You don't think I can recoup any of the lawyer fees? If not, I say just let them forclose on a piece of dirt and then when I get to the defficiency trial, I can show it wasn't my fault and present my case and see if the judgement gets dismissed. Do you think that is a viable option? I know it will hurt my credit but at this point, I know I won't be able to afford a house so I can keep renting - I'm happy where I am --
thoughts?

[Gerry]

The courts can be capricious. All you can do is get a good attorney to help you do all the right things at the right time - and cross your fingers.

Maybe this will help you... Think of the absolute worst case scenario that might come of this. How much is it worth to you to avoid that happening?