Posted on: 27th Feb, 2009 07:35 pm
i was in the process of building a home and the builder abandoned the project leaving me with an unfinished home riddled with structural issues.
when i contacted other builders to finish off the home after an audit of the finances it turned out that the bank inspector released funds to the builder for uncompleted work. example : 100% of the funds was given to builder for brick work when there is a significant amount of brick work that need to be completed. this is just one item overall all missing items represent 20% of the draw amount paid to the builder.
i cannot finish the home because i do not have enough funds left on the construction draws to pay another builder.
i am hoping the bank take the home back in the deed in lieu of foreclosure. if not, do i have legal case against the bank for their negligence in this matter? the inspector represented the bank.
when i contacted other builders to finish off the home after an audit of the finances it turned out that the bank inspector released funds to the builder for uncompleted work. example : 100% of the funds was given to builder for brick work when there is a significant amount of brick work that need to be completed. this is just one item overall all missing items represent 20% of the draw amount paid to the builder.
i cannot finish the home because i do not have enough funds left on the construction draws to pay another builder.
i am hoping the bank take the home back in the deed in lieu of foreclosure. if not, do i have legal case against the bank for their negligence in this matter? the inspector represented the bank.
Hi fredscott,
If you have defaulted on the loan payments, then you can apply for a deed in lieu. You will have to write a hardship letter to the lender and request for a deed in lieu. It will be the lender's discretion to accept or reject it. However, you should note that a deed in lieu will lower your credit score by 250 points.
You can consult an attorney and discuss the whole issue with him. He will look into your mortgage docs and tell you whether you can file a case against the lender or not.
Thanks.
If you have defaulted on the loan payments, then you can apply for a deed in lieu. You will have to write a hardship letter to the lender and request for a deed in lieu. It will be the lender's discretion to accept or reject it. However, you should note that a deed in lieu will lower your credit score by 250 points.
You can consult an attorney and discuss the whole issue with him. He will look into your mortgage docs and tell you whether you can file a case against the lender or not.
Thanks.
Fredscott,
Did you pay a fee to the bank for the purpose of them using their third party appraiser to inspect the property before disbursing funds from the construction mortgage escrow account (assuming there is a construction mortgage recorded)?
If you paid this fee it would be in the accounting of the disbursements and I believe you would have a strong case against the bank if what you are saying is true, however if you signed a Hold Harmless Agreement allowing the funds to go directly to the builder without you signing for them then you need to re-read this document. However, if you signed the Hold HArmless Agreement with the bank and yet relied to your detriment for them to release the funds only after their inspector verified the work was completed then you have been injured because of detrimental reliance on the bank.
I would get all my loan documents and see a good real estate attorney first if what your saying is true. It sounds as if you relied on the bank to verify the work was complete before funds were disbursed to the builder and even paid the required fee to see it done.
Good Luck!
Did you pay a fee to the bank for the purpose of them using their third party appraiser to inspect the property before disbursing funds from the construction mortgage escrow account (assuming there is a construction mortgage recorded)?
If you paid this fee it would be in the accounting of the disbursements and I believe you would have a strong case against the bank if what you are saying is true, however if you signed a Hold Harmless Agreement allowing the funds to go directly to the builder without you signing for them then you need to re-read this document. However, if you signed the Hold HArmless Agreement with the bank and yet relied to your detriment for them to release the funds only after their inspector verified the work was completed then you have been injured because of detrimental reliance on the bank.
I would get all my loan documents and see a good real estate attorney first if what your saying is true. It sounds as if you relied on the bank to verify the work was complete before funds were disbursed to the builder and even paid the required fee to see it done.
Good Luck!