Liability and Responsibility

[Robert Howell]

@Bill Gulley

Originally posted by @Bill G. in another thread:

Different types of notes require different compliance requirements. When you buy a note, any note, you take on the liability of it's origination and all past servicing. Yes, someone may held harmless from past operations, that doesn't mean you still aren't responsible.

My question is one of liability and responsibility.

I purchased a performing note through a broker ( not licensed ), which I now know was my first mistake.

The note came from a licensed fund. The fund sold the property with seller financing using a Land contract. In the purchase and sale agreement, dated in 2012, part of the agreement was that the seller would bring all taxes current to the sale date. These taxes were never paid by the fund and consequently when I approached the fund about paying the previous taxes, they told me that since I purchased the note, I did so with all responsibility for it.

I, on the other hand believe the taxes owing were and are the responsibility of the seller of the property.

Who is right?

[Bill Gulley]

Assuming they didn't net the escrows from the sale;

You are or can be right, the terms of the origination must be met, they misrepresented the note with liabilities undisclosed.....didn't they? Send me the money or I turn it over to the state department of finance, HUD and the attorney general.

Another issue, did you take title to the property so that you can convey title, you take title subject to the sale contract, they probably screwed this up too.

You can also disclose the broker on BP, they might get their clock cleaned, one of my specialties you know.

You are responsible to the borrower, they are responsible to you. :)