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Mortgage Lender going bankrupt?

I'm on the verge of purchasing land. I'm getting a good deal on price because the seller is 14 months delinquent on his payments and the property is about to go into the foreclosure process. The seller wants to avoid foreclosure and sell me the land instead. Yesterday I learned that his mortgage lender has gone bankrupt (not sure what the consequences are of this). So now I have to deal with a situation where the property is on the verge of foreclosure and the lender has gone bankrupt. Is it a good idea for me to proceed with this purchase? What are the risks?

Public Comments

1. At point, you'll have no choice but to hold off on this deal, regardless of how "good" it is. Some entity will be assuming the mortgage and you'll have to deal with that entity in order to purchase the land, but you may have difficulty finding out who that entity it is until you receive a written notice from them stating they will be handling the mortgage / delinquent account. In most cases, it will now take months to get this resolved after the new holder of the mortgage steps in.