What to do if the mortgagee on a short sale won’t accept my escrow check?

UPDATED: Apr 18, 2011

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What to do if the mortgagee on a short sale won’t accept my escrow check?

Approximately 1 month ago I bought my first home as a primary residence via a short sale – 20% down and all forms completed. Abouy 2 weeks ago, my realtor informed me that my escrow check was returned (twice) with no explaination whatsoever. By that time I had already started construction and demo on the home (I am living in it). I hold the title to the home and escrow did close. My title company is working to get in contact with the mortgagee but with no luck after a month now. What do I do? Can the mortgagee foreclose my home? Why would it stop all communication? Has anyone ever heard of this?

Asked on April 18, 2011 under Real Estate Law, California


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I am confused as well here.  You CLOSED on the house and took title and THEN the escrow check was rejected?  Are you sure that is what happened or did you jump the gun, so to speak, before all the paperwork was really finalized?  At this point in time I would forget about the title company and the realtor and go straight to a real estate attorney.  You need to protect what rights you have - once you figure out what they really are here - and soon or that demo and construction you did and are doing will be free to the new homeowner.  That is if the mortgagee does not hold you liable for damages as well. Good luck to you.    

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