Can a builder who carried an owner contract actually "foreclose" if I am willing to give up the house?

Question

The builder of my home carried a contract for me for a period of one year beginning November 1, 2007. At the end of that one-year period, the house was to be refinanced. My house is on a cul-de-sac that had eight new homes on it, mine being the first one sold (and the smallest of the eight). Subsequently, the housing market dropped and two of the other homes (almost 500 square feet larger than mine) were sold for less than I paid for my home. Due to that fact, my home will not appraise high enough to refinance it. When we did the contract, it was recorded with the county, I paid taxes, etc. My contract, however, was subordinated under their "umbrella" construction loan. When I notified them that I would be unable to refinance the home, they offered to lower the price, however, changed their minds. I have since told them I am moving out and will turn the keys over to them as soon as I have it cleaned up, etc. (which is actually 2 months prior to my year being over). In this case, what am I liable for? I have lived in the home less than a year (no damage, etc.), I am offering them the property back, etc. Can they sue me for the difference once the home is sold?

Answer 1

Yes, they can and will foreclose to regain legal ownership of the property.  Why would they not be able to do this?

Can they sue for the difference?  Maybe.  That depends on state law.

Answer 2

If you signed a contract you may be held responsible, i really just wanted to say thats a bad situation and I understand your point of view and I hope it works out for you.