Forgive me if this is not the correct forum....

I need help working through an issue in our hunt for land to build a home.

So I live in a small Sububan Chicago town. So small and desirable that there aren't many vacant lots left in town.

I call a guy that is selling his lot (the lot adjacent to my Father's childhood home) and he is asking $240,000 at the time of the call in the summer of 2010.

My search is still going on at the end of 2010 when I learn that the lot owner is acting as the "General Contractor" on my best friends addition. My wife and I decide it is time to approach him again since the property is still available. I plan on calling the guy on a Sunday and my best friend calls me the day before and tells me the lot owner has been served and is looking to get rid of it for what he owes on it which is $150,000. My wife and I are more than excited...

I start doing some research with an appraiser friend of mine and he tells me I might be able to get it a little cheaper, more like $125,000.

I meet the lot owner and starts telling me how he is in a tough spot and just wants to get out of the property for what he owes. I tell him it might be worth a little less. He tells me that he owes about $80,000 on the first mortgage and then he took out an equity line against the home (before it burned down) of about $70,000. He said he will talk to the bank and see if they will negotiate on the equity line. He agrees to call me back after he gets in touch with them in the next day or two. A week goes by and I leave a message for him, another couple days go by and he calls me and tells me that the bank told him to wait for a "package" in the mail that will include his payoff amounts. He got the package and the first one was for about 80k and the second one was for $681,000. He said the band screwed-up and the name is correct on the documents but the loan number is wrong and that he would have to get it straightened out. I then told him that I will just pay what he owes on the property and told him I would like to write up a contract for the property so we have something to present to the bank. He kind of blew it off and said "ok, but let me try to work this out with the bank first". That was two weeks ago and I haven't heard from him since.

During the time spent waiting for him to call back I went to the county and found out he bought the property in 1990 for 78k. In 2003 he refinanced for 114k. Then in 2004 he took out a second mortgage for 70k. In December of 2004 his house burnt down and according to him the insurance company gave him $80,000. I'm assuming he took 30k and put it towards the 114k and pocketed the other 50k. The county also told me that the first property is in foreclosure but the second mortgage is not.

I tried dealing with the bank and they didn't give me any help or I was talking to the wrong person.

My questions is...how do I go about buying this property with a homeowner that isn't interested in selling and a bank that really doesn't own the property.

I am sorry this is so long but any help would be appreciated.

Jerry