Lawyer called us today... there’s a defect in the title/deed/whateverthefucktheycallit... a bad one.
Apparently the house, which we already knew was a foreclosure, is actually furthermore, part of a bankruptcy settlement. At the time the deed in lieu of foreclosure was surrendered to FNMA (Fannie Mae) the transfer did not include a current official appraisal, it was transacted only for the default value of the mortgage, with no provision to account for the appraised value. What this means in legal terms (as I understand it) is that the bankruptcy court could claim that the value of the property at the time of transfer was in excess of the agreed-upon value for deed transferral and absolution of that debt and they could attempt to claw-back the last appraised value (from 2012, and almost double our accepted offer on) of the property as “hidden” assets at the time of the declaration of bankruptcy. The protections of bankruptcy law and the way the transaction was conducted with FNMA means that the *OWNERS OF THE PROPERTY* would technically be on the hook for that... I’m not sure how exactly that works, but that’s what our lawyer claims. Futhermore: FNMA indicates they *KNEW* they fucked up the title transfer and tried to sell the house anyway, without disclosure. This is both a real dick move, and technically illegal in the state of Vermont.
Closing date? Not any time soon... certainly not the 30th as contracted.
in addition that lawyer that wrote the contract and executed the deed transfer to FNMA from the bankrupted owners has apparently dropped off the face of the earth and is unreachable. Which is probably good for him (but bad for us) because apparently he could be disbarred and/or fined for what amounts to fraud (but isn’t legally defined as such) if he isn’t involved in fixing this... and without his input the house can’t 100% safely be sold until the completion of the bankruptcy proceedings... (three years, and the condition the roof is in, it might not survive another winter unoccupied.)
Status of our 10% earnest money? “There’s no way they’re keeping it” says the lawyer “I don’t care what their contract says” she further rants...