Foreclosing on partial construction

[whizzif]

Hello,
Our builder has not paid subcontractors and overspent on material and is basically $60K in the hole or more -- and the bank won't release any more funds -- we don't want them to -- so it's a bit of a stalemate. Because of the lies and delays, we're not going to be able to move (this was in a different state that we were building)
So, I know we could go after the builder but if he files bankruptcy -- there might not be any money there
Can we foreclose on partially finished houses? What are we looking at in terms of liabilities financially --
Does anyone have any advise on this? I've read through some of the loan paperwork -- the bank said they can hire a contractor and finish it and we're responsible for the difference but how can we be held liable for another builder's mistakes?
We can't afford the interest payments anymore, it's draining us --
Is there a way for us to get out of this?
Any help would be sincerely appreciated?

[HHM]

Have you gone after the General Contractors bond. If you used a licensed and bonded contractor, you need to get in touch with your states bonding authority and file a claim. (or however it works in your state).

I am not sure what you mean by "can we foreclose...". The answer is probably no (at least under the usual meaning of foreclosure, foreclosure is something a "lender" uses when they have a secured claim on property and the borrower has defaulted).

Basically, you are going into a big mess. The Subs are most likely going to file Mech. Liens, (if they haven't already) which will encumber any attempt to transfer the property. I think you need to go after the builder, at least to get a place in line.

Unfortunately, short of YOU filing BK, there really is no easy out.