House buying problem

oddone

Hi
I have been attempting to buy a house in a chain of 3 since last October. I am at the bottom of the chain and a first time buyer. All of my papework is in order, ready, surverys done, solicitors paid etc. As is the woman whose house I am buying. The estate agent has been telling us that we are moving in next Friday every week since November. She nearly made me cancel a Christmas holiday because the purchase would complete while I would have been away. However, last week, it transpired that the lady at the top of the chain owed more money on secured loans and mortgages than her house was worth. Her house was repossessed. The woman above me then went directly to the Kensington (repossessers) and offered her surveys and everything so that they could see the market value and still go through with the sale. They took the surveys and then ordered another one done. They aren't answering anyone's phone calls and it is rumoured that they are remarketing it with another estate agent. Meanwhile, whenever I call my solicitors, they aren't up to date whatever. Last week, I called them and they didn't know any of the above. So, I have been keeping them informed. It seems that know the estate agent and solicitors are encouraging me to drop out of the sale. The solictors fees are no sale- no fee, if I drop out I lose all my fees. The woman above me wants me to stay in the sale because she hopes to make another offer on the same property when it is remarketed.
So, there's my story. My questions are;
1. Is it legal for this woman to have put her house on the market when the bank owned more of it than here?
2. Should someone have found out about her debt problems before it got this far?
3. Have the estate agents and solicitors been negligent? I ask this because before we knew about the problems, our estate agent was telling us we could complete and exchange in one day / next week or sometime in the near future and that this was what the solicitors were saying. Then, the solicitors said that they never give completion dates and it would have been impossible to complete when there was outstanding paperwork.
It has been so stressful and I don't know what to do. If I back out, I lose 1500 pounds.I feel like I have received no service from estate agent or solicitor. The estate agent will ignore my calls for weeks. She was supposed to call me last Tuesday and today is Sunday.
Help??? Advice???
Thanks
Sarah

lynzpower

the bit that bothers me here is that you are doing your solicirtors job for them. I understand how easy it is to do, god I did LOADS on behalf of my sol.

But this is something your solicitor should be finding out, Im sure.