Interesting Auto Loan Scenario, Can This Happen With A Home Loan?

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Services for Real Estate Pros with Top of Mind Networks

This is slightly off topic but the story does involve auto lending vs. real estate lending.

A buddy of mine recently bought a truck from a local dealer here in Atlanta and traded in his SUV as part of the deal. Well, about 2 days later that dealer filed for bankruptcy. The check from the dealer to my buddy's old lending institution for his loan on the SUV bounced. So he had already given the SUV to the dealer and found out about a month later that the original loan was never paid off. So he is now stuck with 2 payments! He had to hire an attorney to track down the SUV and get it back for him so he at least had possession of the vehicle he was stuck paying for. The attorney also told him the dealer was obviously in breach of contract but there was essentially nothing he could do because they had filed for bankruptcy and as far as creditors to them go, he was small potatoes and would likely never see a penny from them. He was basically robbed by these guys and there is not a thing he can do about it. The ironic part is that he is a cop.

Anyway, I just thought this was interesting. I know with home loans the actual deed never really changes hands until the money is cleared right? I guess auto loans are conducted differently. Is the above mentioned scenario even possible with a home loan?

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