Legal Question in Real Estate Law in Texas

Re: Default on Warranty Deed with Vendor's Lien

You probably signed a Promissory Note when you bought the property. You are liable on the note, the land is the collateral to secure payment on the note. the note holder can seek to recover from you the full amount owed on the note. becasue this was a no credit needed, no credit check deal I suspect the land was overpriced. I also suspect that if you default the lender (seller?) will foreclose on the land, bid in low at the foreclosure sale and look to you for the rest of the payment due on the note (subtracting the amount bid at the foreclsoure sale from what is owed on the note). You might wish to discuss your options with the lender. Unless the lender has accelerated the note you may just pay the amount that is overdue. Good luck! Larry Maun 713.266.2560

Re: Default on Warranty Deed with Vendor's Lien

Howdy:

It is completely up to the lender as to whether it is reported to the credit bureaus.

The best thing is to ask them about it. If the value's increased, and if it's an owner financing type of deal, they may actually want it back.

If the value has declined, or if they actually sell it at a trustee's sale and get less than what is owed, they can issue you a 1099, and report the deficiency to the IRS as income.

I assume you haven't talked to them yet. As with any credit situation, always keep communication open with the lender.

Hope this helped.