From Pre-Foreclosure to Pre-Trial Hearings
Author: Milton B. Yates • URL: http://www.miltonyates.comMay 25th, 2008 •
BEWARE! BEWARE! BEWARE!
I am quite sure that many of you are staying abreast of the new laws regarding dealing with sellers and properties on their way into foreclosure status. On my side of the country it is especially critical to follow all guidelines of the pre-foreclosure business. Those who are choosing to take their chance are finding themselves in JAIL. These not so new but recently enforced laws have real estate investors chasing the same agents they kicked to the curb years ago.
In Maryland, we can not make contact with any home seller who is 60 days or later past due on mortgage payments. Only a real estate agent has the authority to make such contact. Now all of the sudden real estate investors in deep negotiations with sellers who are in similar situations must immediately cease fire.
I would jump out and say that 65% or more active investors have some dealings with pre-foreclosure homeowners. On top of that, 100% of real estate investing courses promise to keep students up to speed on the latest laws and regulations surrounding the field but the information is not being taught. Government officials and local newspapers are cracking down hard on these programs and these programs are becoming the blame for transactions gone wrong. There is one case in MD where a homeowner is attempting to sue a real estate investor, the buyer, and the program through which those persons acquired their real estate investing expertise. And it seems as though they have a very strong case when looking at all of the facts.
I have just a few tips to help save you investors some trouble before it comes.
- When initiating your conversations with sellers, immediately ask whether payments are current. If the payments are not current, kindly request that they sign an authorization to release loan information to your company and its agents to obtain an accurate picture of their mortgage. There are many times when a seller does not disclose that they are behind in payments, being notified by attorneys, are already in foreclosure. Getting the scoop directly from the lender will keep your tail out of jail.
- Put a QUALIFIED real estate agent on your team. Agents are the only persons who can hold a conversation with a seller regardless of the position they are in. Agents are the most important piece to your pre-foreclosure business. It is called “list it and I will be your first contract on it.”
- Either get with the new rules or get a GREAT LAWYER! If you continue to operate your pre-foreclosure business in a fashion that ignores the rules, you may find yourself behind bars. “The Foreclosure Consultant” stipulations in the Maryland State Law are very stiff and penalty heavy. Check your local laws to see what applies and what doesn’t.
- When your real estate direct mail campaigns go out, have your agent return the calls to screen who you can and cannot talk to.
- If you take a course on real estate investing and someone promises to tell you how to negotiate short sales, ask if they are having a lawyer on site to explain the whats, whens, and hows of the law.
Blessings to your Real Estate Investing Business,
Milton B. Yates
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Tags: foreclosure law, law, pre-foreclosure, real estate investing, Real Estate Law
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
Humm, Wonder whose greed is behind this development.
Dave
OK, share your secret. How do you persuade a realtor to return your direct mail campaign calls for you? You’d have to be doing a lot of deals every month - right? I’m not sure everyone is in a position like that.
Can I get a link to a .gov or other reputable site that states the actual law that only agents can talk to a homeowner over 60 days behind in payments? I’ve heard about that maryland case, and have yet to find any proof that a 60 day law exists.
A) ERIC-What does your post have do do with this Blog topic?
B) Anthony, it starts with Senate Bill 761 -2005 which I did not look long enough to see the outcome, but like CA and MOST states today, the “foreclosure consultant” and “equity purchase Laws” are VERY much enacted to shut down the shady Guru learned creative investor. I am all for that as most courses and Guru’s focus on “finding deals” that involve homeowners in severe DISTRESS to include:
Foreclosure
The Elderly
Divorce
B.K.
Illness
Google Whatever state and “foreclosure consultant” and “equity purchase” Laws.
I have a years to go in Law school and have to read this stuff several times and do a lot of cross ref, so I fell the average person will get lost in the legal wording.
As Milton suggested, ALWAYS spend some time with a VERY experienced RE Lawyer and know your states Laws. (BTW-MOST RE Lawyers, do not know the foreclosure Laws very well)
C) I have said a million times that experienced and successful investors
that have a lot of assets and a solid reputation to loose, are staying away from the pre foreclosures.
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That my friend is EXACTLY the fall of the Roman Empire. These Guru’s teach these seminars all over the Country. With tough existing State Laws and more and more modifications and all the bill in and passing congress etc. there is NO WAY that any Guru can give blanket advise that would be legal and ethical in all states. It is my observation that MOST do not give a damn.
Is what I intended to type above.
O.k. I give up for right now as what I am typing is not posting correctly for some reason?
Realestator
You wrote
Depending on the state or the wording, the letter alone could be illegal, or at least be included as evidence against you in a lawsuit or action against you at a later date.
Keep in mind that MOST Reators are not Lawyers and don’t know the Laws either.
I CA a Realtor listing a pre foreclosure, is supposed to post a bond! I have never heard of a Realtor doing that, so we will be seeing more Law Suits and more Realtors ending up in trouble.
Here in Kansas we were served notice on an old, previously unenforced statute that may or may not lead to trouble regarding short sales/pre-foreclosures. Of course, there is not case law in Kansas regarding the law so now everyone is scrambling around making sure they have the right disclosures/addendums.
Will be interesting to see where this leads.
Thanks for the info on this hot topic. Also, thanks for advocating the need to for an agent in some matters. With the way the market has gone the last several years, some think that agents have no place are not necessary any more. Very eloquent post. Cheers.
In my mind, it is better to invest in something that is going up, rather than down. That is why I think the province of Saskatchewan is the perfect place to buy real estate right now.
The smart investors have been using real estate agents anyways because they understand the value of an extra set of eyes as well as having a professional opinion to look back to. Its the “I think I can do it better myself that had to “come back” to realtors”.