Preforeclosure "subject to" and Bankruptcy

[Josh Kindlesparker]

If I buy a property "subject to" from a seller in Preforeclosure. I make up the back payment of $7500. What if the seller then files Bankruptcy? What protects me, if anything, from loosing the property and cash?

Is there any way to protect myself. I plan on selling the property with a lease option. I do not want to loose my money or my buyers money.

[Jon Holdman]

When you buy subject to you get a deed to the property. Its now yours. It can't be taken from the seller because he no longer owns it.

Now, the lender can come after the property. You've violated the due-on-sale clause and that give them the right (but not obligation) to foreclose. If that happens, you would need to refinance or somehow pay off the loan.