A very complicated question!!
Question: This is not an easy one. I placed an offer on a multi-family dwelling in NY State. The owner lives in PA. The bank holding the mortgage is also in PA. My offer was accepted….however the bank began foreclosure proceedings and I then attempted to deal with the bank. My offer was below the amount owed on the mortgage…the bank was willing to consider a short sale but, as it turned out , the mortgage hasd been sold to the government. (Fannie Mae?) The bank however, was willing to act as the intermediary. At this point the owner declared bankruptcy! My question is…who now has the authority to make the sale, or does the property have to be sold at auction? Anybody out there who can figure this one out!!!
Answer: Not as complicated as it looks. I’ve passed this on to a lawyer to get a legal opinion. My guess is the right to sell belongs to the BANKRUPTCY TRUSTEE (appointed by the bankruptcy court). The trustee has an obligation to look after the interests of the lenders, both secured and unsecured.
I’m not sure what the status is with your acepted offer, but I would certainly remake the offer to the bankruptcy trustee and the mortagage owner (or at least the bank).
The property does not have to be sold at auction, but it might be a good idea if there are inferior (second, third, fourth . . ) mortgages on the proprerty.
I hope that helps — will get another opinion for you shortly.
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