Can A Foreclosure Settlement Be Delayed By The Bank Indefinitely?

I'm in the midst of an unfortunate (but not entirely uncommon) situation with a bank owned foreclosure in Southern Maryland, and I thought it might be useful to share it with you. I'm in the process of buying a bank owned foreclosure (REO) that I went under contract on at the beginning of October. I was scheduled to go to settlement on November 4th. As of November 18th, I still do not have possession of the house.

I got through the loan process just fine, my lender has me fully approved and ready to go to settlement. The reason we haven't closed on the house is because the Bank that owns it is missing paperwork. The paperwork they are missing is the proof that they actually own the house and have the right to sell it to me. That's right, they can't prove the really own it.

I'd like to think that I'm somehow special. It would be great if I could use my Realtor super-powers and demand they either fix this immediately or compensate me somehow for the inconvenience (and added cost) of extending loan locks, property certifications, moving delay expenses, etc. It would be nice if they acknowledged the fact I am living out of boxes eating take-out because my kitchen is completely packed.

When Thanksgiving comes next week, I'm fairly certain the bank reps will be at home spending thanksgiving with their families crowded around a big turkey and cranberry sauce. I'd love to be doing the same, but instead I'm calling my family to apologize for canceling dinner at the last minute because I still haven't moved into my new home.

So what is a buyer to do? If the settlement were delayed because I wasn't ready, I'd be forced to spend $150 per day to extend the settlement. Because the bank selling the property is at fault, The only recourse I have is to cancel the contract or sign another extension and wait. I don't have the right to charge them a daily fee for screwing this up, and there's no telling when they're going to get this whole mess straightened out. As for me, it looks like I'll be doing Thanksgiving at the Hunan Garden this year.