Skip to main content

Seller has ongoing litigation against a lender involving an ADU loan

Hello, we are in contract to buy a real estate investment property in La Mesa, San Diego county.

During our due diligence we learnt that the seller has an active loan they took out to build an ADU from a lender called Mosaic. The seller was working with a general contractor firm who helped them file for the loan. The loan is about 100k at 10% APR over 10 years.

The lender paid the GC in full. Permitting for ADU was done, some construction work and inspection was finished (foundation was laid, utilities were brought in). The GC eventually vanished and files for bankruptcy. This was a big news in San Diego, GC being MultiTaskr.

There is a class action lawsuit against the lender implying them being part of a scheme with MultiTaskr that have defrauded hundreds of people in similar way.

Now, our title company says that there is no loan/lien associated with the property. There are no active judgements.

I am wondering if in future the seller loses the case and lender somehow gets a judgement against the seller instead can they place lien on the property retroactively. Would we have any potential exposure?

Title company says no. But I would like to get advise from folks here.

submitted by /u/coolkarniamit
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/1h0zb3k/seller_has_ongoing_litigation_against_a_lender/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

How to Avoid Property Scams in Delhi?

Here’s What You Should Know! Commercial Real Estate (Non-Residential) Buying a property in Delhi can be tricky, especially with all the stories about scams and shady deals. If you're in the market, here are some tips to keep yourself safe:Double-check the documents: Always verify ownership and approvals. Don’t just take someone’s word for it—look at the actual papers. Do your homework on prices: Compare similar properties to avoid overpaying. A little research can save you from a bad deal. Work with trustworthy people: Whether it's a seller or an agent, go for someone who's transparent about pricing and the process. If they’re dodging questions, that’s a red flag. Ask for reviews or references: If someone you’re dealing with has a good track record, they won’t hesitate to share testimonials or connect you with previous clients. I’ve noticed that some property services have started focusing on things like verified listings and clear communication, which makes the whole proc...
Post a Comment
Read more