Subject To Existing Financing Deal Gone Wrong Help

[Eleasha Counts]

I have a client who is in a Subject to Deal that has gone off the rails a little. I need some help in trying to help him. The client purchased a home in Gulfport, MS on a sub to with a wrap around mortgage in 2016. The wrap mortgage paid the seller an additional $75.00 a month directly. The purchase was to be completed by April 2021. In October 2020 Hurricane Zeta came through there and a tree fell on the house. It caused extensive damage over $40k worth of damage. The seller got the insurance money from the insurance company and claimed that he put it in the bank that was holding the mortgage. My client paid the deductible and paid for the tree removal, a tarp to be placed over the home and for 2 general contractors to come out to review and give estimates for the repairs. He submitted all of the documentation to the Seller. The seller responded and wanted my client to pay for all repairs out of pocket and submit the receipts to him so that he could in turn submit them to the mortgage company to pay. My client did not have the funds to do that and stated several times that the seller would need to release the funds so that he could hire a general contractor to get the work done. The seller then came back and wanted my client to agree to use the insurance money as a credit towards the wrap around mortgage. Then stated that my client could just pay the rest of the house off. My client refused to do that because it would be insurance fraud. So the home did not get repaired. Because the seller never gave the money from the insurance company to get it repaired. Now the seller is suing my client for the cost of the wrap mortgage, his attorney costs and wants to take the house deed back. I wanted to know if anyone has had a situation like this and what did you do to get out of it? I also wanted to know if anyone had any recommendations for an attorney in Mississippi that deals with creative financing deals.  

[Wayne Brooks]

@Eleasha Counts Just to confirm....

-I assume the buyer received title, since was sale by wrap mtg

-I assume the buyer did Not get insurance in his name and left an insurance policy in place in the seller’s name...big mistake which led to this situation

-I assume the insurance check was made to the seller And the bank holding the mtg, which is standard, the bank only releasing funds for repairs as they are completed. Note, this is different than “the seller got the check and put itin the bank that held the mtg” as the seller wouldn’t get a check that he could deposit wherever he wanted.

Yeah, this a mess.

Question....under what breach is the seller suing the buyer for foreclosure?  Did he stop paying the wrap mtg, or what?