Subject to seller wants house back

[Chris Miller]

Would like some feed back on this scenario. I bought a house Subject to the existing financing from a guy on 6/18/15 his wife called me tonight 12/17/15 saying she is going to get the property back and sell it and her husband was diagnose with altimezers a week ago and may have had it for some time and remembers nothing now and she will sell the house and keep all the money. I am speechless. She says I am screwed and there is nothing I could do and no judge would rule in my favor. This house was listed from 2/21/14 to 8/31/14 for $142,900 and 10/23/14 to 4/24/15 for 139,900 on the MLS by a realtor he would have to pay 6% if it sold however it didn't. . He called my company on 4/29/15 and his information was taken down that day. On 5/7/15 he entered in a contract with me to purchase the house subject to existing financing with the loan balance $110,452.95 and I gave him 200 and caught the loan up that was 3 months behind. We closed the property on 6/18/15 at a title company. He signed Seller's Due on sale disclosure, Borrower's Authorization to Release Loan Information, Limited Power of Attorney, Mailing Address Change notification, Insurance Change Notification, AND a long list of Seller Acknowledgement and addendum to Purchase Agreement. In there he initialed that he is under no duress and am mentally competent and that he entered the purchase agreement transaction thoughtfully and deliberately. The loan is current. I have since put $40,000 in to the property and turned it into a 5 bedroom 3 bath house with a buyer lined up to close in feb. once I am finish in January the new buyer wants to sign the contract.

Can the wife who was never on title get a power of attorney and take the property from me? Will a judge allow this to happen? Can she stop me from selling this to my buyer that I have lined up by clouding the title somehow? What are my options? She claims she has a lawyer and swears that I am screwed and there is nothing I could do.

p.s He sold me this house because he said that he was moving in with his wife and that having to houses was becoming difficult to maintain. I even caught the mortgage up since it was about 3 months behind when I bought it from him. And wife knew what was going on. He did not appear to have any issues at the time we talked and signed. The house was listed on MLS for over a year.

Would like feed back on how you would handle this and have you ever head of  a seller getting the house back like this from a judge and most importantly can I sell this to my buyer lined up two months from now. I Don't want her clouding the title. Thanks