Jeanette ~ without knowing the timeframe for the approval, if it was signed by the seller and the lender and in escrow, how much information you provided to the bank about the IRS problem and if they signed off on it (if it was a lien did the lender agree to pay that lien or was it going to be removed?), and/or if your approval was final to the point that the lender had notified the foreclosure company of the postpondment?  These are questions that I would need to know and you should know in order to try to answer the question.  And oh, did you call the lender and ask them why or how could they go back on an agreement.

Now if it was a verbal agreement, its not worth the water in the strainer.  Hope this helps.  If not, give me more information.  Sorry to hear that they went ahead with the foreclosure.

Jeanette - how terrible is that.  These lenders seem to be heartless on this side of the transaction that they were "buyers friend" at the beginning when they were approving those crazy loans and such. 

If you had an approval for a certain date to close: The lenders usually will not extend that date but if you asked in writing and told them the problem and that you were clearing it and how much more time you needed.... and if it was not an outrageous time frame, plus you could have given them the IRS contact if they needed that to verify that you were not just trying to stall the sale.... that should have worked.  But since it did not work... 

If I were the owner/seller: I'd write letters and try to negotiate my credit since it was short sale approved.  I'd get the IRS letter of lift intent (if they will give it now). Or I'd use any information I had on the communications with the IRS.  Talk to a real estate attorney or advisor or someone that would know the next step.

If I were the buyer: I'd fight because there was a signed agreement.  I'd fight right along with the seller.

If I were you: I'd fight to clear this up.  It would take a lawyer to tell you your next steps.  Might be a time of redemption for the owner to complete the sale as agreed upon.  Might be tight if .... the date agreed upon had lapsed prior to the trustee sale.

And of course, different rules for different states. I'm in California.

If that did not work.... and the buyer still want the house.  I'd wait until the property is assigned to a REO agent and purchase it that way.  Probably will get the same type deal.  Of course, that cuts you out of the proceeds of a commission. 

Jeannette ~ funny thought.  Now that the bank has taken the property, they will have to work with the IRS to get the lien lifted from that property BEFORE they can resale it!

Thanks for sharing... this has given me a couple of ideals on my next blog!  Oh and I added you to my associates list.  Good luck with this situation and I sure hope that I have been helpful.  But do not take my words solely, use it as a stepping stone to go to a real professional (attorney for real estate that knows about foreclosures and the rights of your state.)

Nice meeting you.

Steve ~ good point, however, I do know of some owners that have been able to do the short sale while not in pre-foreclosure (3 or so months in default ).  So.... not to be misleading some time it does happen so that is why I said it like that.  The majority of the lenders will not approve a short sale unless it is in default.. but you have to be careful how you tell owners that so that it is mistaken that you are telling them that they should go default... and we can't lead them to do default in order to get a short sale.

But as a rule, being in default is the first thing they check.

John ~ thank you for your response.  There is always the other side of what is going on.  I think the lenders need to hire more "negotiators".  Get their files caught up and then worry about vacations, long breaks and enjoying the job.

After all, they enjoyed the flood when they were approving these killer loans.  Well, not the negotiators but the companies.