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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 110467
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Wraparound note: new buyer of a motel signed a wraparound note.

Customer Question

Wraparound note: new buyer of a motel signed a wraparound note. Seller had failed to disclose the sale to his bank. New buyer entered into wraparound note agreement with seller for over 6 months. since taking over the motel, buyer has made all of monthly payments on a time.
Now, Bank is threatening to be paid in full or bring foreclosure against the seller and forwarding a letter of demand to a new buyer.
If bank proceeds with foreclosure, can a new buyer file an injunction in a state court and request that the buyer to be allowed to arrange a loan to pay bank in full ?
Buyer needs about a year or so to arrange the loan to payoff the current bank.
Submitted: 6 months ago.
Category: Real Estate Law
Expert:  J. Warren replied 6 months ago.
Hello and welcome to JustAnswer. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.Insurance fraud is when a person performs a deceitful act with an intent to obtain an improper payment from an insurer. What you described is not a fraud if the work was performed that the insurance covered and you did not pocket extra money. All my best and encouragement. Thank you for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! Please press a positive rating above this message box in the ratings section so I will be paid for my time assisting you on this matter. Pressing a positive rating will not cost any additional money - it is simply the trigger used by Just Answer to pay me for my time (pressing the middle star or the fourth or fifth star on the right are all positive rating buttons).
Expert:  J. Warren replied 6 months ago.
Sorry computer glitched to another question.
Customer: replied 6 months ago.


It appears to me that your reply does not relate to my question-Wraparound note.

Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

I sincerely ***** ***** the technical issue, it is a site bug where answers to another question appear in the wrong place. It has been reported, but not yet fixed and I am truly sorry.

If this wraparound note violates the seller's mortgage agreement, the buyer cannot sue the bank to stop them from calling the loan in due in full. The buyer would have to sue the seller to make the seller either finance the property or refund all of the buyer's money plus damages suffered by the buyer for this improper sale. The buyer has not had any contract with the bank, so they cannot go after the bank (although they can try to negotiate with the bank to assume the mortgage or work out some other deal to stop the bank from foreclosing), the buyer has to sue the seller, since this is a breach of the sales contract.

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