Expert: Sue Bernstein - 8/30/2007

Question
I recently relocated from FL to California (Rancho Cucamonga) and was in the process of selling my FL home and buying a home here in Cali. My home in FL was scheduled to close on June 29,2007. After some financing issues with my buyer, they pushed the closing out on my house in Florida several times due to their inability to secure financing. My financing in Cali was already signed and ready for closing (as soon as my house in FL sold). After I spoke to my agent and mortgage broker they pressured me to simply close on this house in Cali and my home would probably close on Monday the 9th. So, I closed on the house in Cali and on Monday received the call that the financing the buyer of my home in FL was trying to secure fell through and the deal was over. I was (and am) devastated, now I have two mortgages (and cannot afford both) and am faced with a potential foreclosure. After re-reviewing my loan docs for the house in Cali - one of the "Funding Conditions" listed on several of the docs I signed was a "Final HUD 1 settlement from the sale of my FL house netting no less than $35,000." Well, this doc was never produced obviously since my home in FL never sold. I am wondering now if my contract here in Cali can be "voided" or I can somehow get out of the house deal since I never provided my mortgage brokers that document. I'm half thinking they might have forged this doc to push the closing through. Is this contract actually valid since they never received the final HUD 1 from my FL house?
Thanks for your help!

Answer
Dear Robert,

I am really sorry to hear about what you are going through. Start off by calling that lender who made the California loan and ask him why your loan was funded without the HUD1.  If you feel that there was forgery or anything unscrupulous you need to talk to an attorney right away to see if you have any options to vacate the sale.  I am guessing you didn't need the $35,000 to close on the new house.  Are you able to rent out your FL home?  That might be a solution if you are able to cover your payments.  Even if you are a little shy there are many tax advantages that might offset the loss.  If you can cover both payments for a little while you might be able to get a more qualified buyer in.  Talk with your agent in Florida and see if he/she can come up with any options.

I hope this helps and good luck.

Sue Bernstein