Upcoming Foreclosures

Question about a contract?

I entered into a contract to buy an REO home. Today I got a call from the Closing attorney stating she had found problems with the title. Apparently the bank foreclosed on a dead person, instead of their estate or heirs as they are supposed to... now we have to wait for the home to go through foreclosure all over again and run the risk of loosing the home to another buyer during the homes second run through the foreclosure process, and even after it makes it through that, we may be too late for the 8k first homebuyer tax credit. My question is, since the bank was knowingly trying to sell us a house they did not have legal ownership of, do we have any grounds for a lawsuit? I would imagine this is at least a breach of contract/misrepresentation issue and at the very worst flat out fraud.

Public Comments

1. You would have to prove the bank KNEW and purposely was trying to push through a sale with a cloudy title. That is why you have title insurance. These things should be unearthed before you go to closing. Be thankful you didn't find this out a few months after closing on this house! I don't believe you would prevail in this case.