Loan Servicing Company Sold a Home Despite Not Having Clear Title

[Mr. Knowitall]

The loan servicing entity had no valid interest in the home at the time of the auction. In other words, they were selling something they neither owned nor controlled. HUD had paid the debt owed the mortgagee and taken control of the asset one month prior to the ops “purchase”.

The issue is not whether they owned the land, but whether they reserved for themselves a contingency in the event that they later discovered a problem with title or ownership. If the contract lets them escape under the circumstances described, then there would be no basis to assert that it was breached.

Op couldn’t have a binding contract to purchase the home because the seller didn’t have any interest in the home any longer.

You can enter into a binding contract to sell something that you don't own. But you put yourself at legal risk by doing so, as if you do not obtain and convey the property you open yourself up to liability on such legal theories as breach of contract and fraud.