Which states have laws against door knocking Pre-foreclosues?

Question

I’m learning some states have laws against door knocking pre-foreclosures/distressed homeowners. I see a lot about “equity skimming” which is very specific and doesn’t mean every investor is looking to skim because they door knock.

Which states can you not door-knock? How do agents get around this? And, are there any exceptions around door knocking pre foreclosures on those states?

Chris Seveney · Answer

@Mike Hern

I know Maryland does

Claude Diamond · Answer

Hi John, I was just thinking to myself why anyone would want to door knock. I love direct sales but it seems to be door knocking for leads or sales is the proverbial  "needle in the haystack" style of marketing. I personally like to use attraction or content marketing; better use of my time, less rejection (which takes a psychological toll on you) and higher quality leads. I get fresh leads everyday by posting quality, non commercial contemporary content on a daily basis.

Marty Boardman · Answer

The MOST difficult part of this will be getting the lender to provide you with the reinstatement figure to bring the loan current (I do this and take title sub-to because it's actually easier to get the lender to provide a reinstatement than a full payoff).

To do this, contact the lender WITH the seller on the phone. Tell them that you're helping out the homeowner and have the funds to bring the loan current. Don't give up. Call back as many times as it takes until you get someone on the line that can do this for you. Sometimes they'll provide the figure and you can wire it in. I've brought cashier's checks to the auctioneer at the courthouse steps to stop the sale before. Other times the lender gave us a postponement (anywhere from 7-14 days) to get the funds sent in.

This is like pulling off a touchdown drive with a minute on the clock and no timeouts. It's nerve-racking, but a rush if you can get it done and help the homeowner avoid losing their home at auction.

Marty Boardman · Answer

In Utah, you're searching for the Notice of Trustee's Sale. You can find that document recorded at the county where the property is located, or you can search public notices (here's a link for Utah):

https://www.utahlegals.com/(S(qz3suyqbucrgtawc2hx2bhv4))/def...

Search 'foreclosures' in the dropdown menu.

The Notice of Trustee's Sale will contain the "trustee" name, that is who represents the lender in the proceedings and you can contact to verify the case is still active. Sometimes it's an attorney, it could also be a title company.

Also, if you're going to the county to search for the notice they will not give you a "list" of foreclosures. The county doesn't compile lists, all they do is publish these notices.

Hope that helps!

Marty Boardman · Answer

I don't do any investing in California. Far too risky there for pre-foreclosures because of the registration law you mentioned.

Most of my pre-foreclosure business is in Arizona and Wisconsin, but I've done deals in Illinois, Texas and New Hampshire as well.

I advise anyone looking to do pre-foreclosures to stay away from California, Maryland, Washington and Oregon. Maryland, for example, has a law prohibiting investors from contacting homeowners in foreclosure once they have 30 days or less left until the auction date.

I've closed a handful of pre-foreclosure deals where the lender advised me to bring the reinstatement in the form of a cashier's check to the courthouse steps and hand it to the auctioneer. The auctioneer called the trustee to verify and then cancelled the sale. Doesn't happen often, but it does happen.

Account Closed · Answer

Washington Oregon California and a few others.
Generally, an agent can door knock if the purpose is to List the property. However, if it's the intent of the agent to purchase for their own portfolio it may be a violation of law. "May be" doesn't necessarily mean "Will be" so check with your local attorney.

Richard Dale-Mesaros · Answer

NH has RSA Chapter 479-B pertaining to non-licensees operating in the pre-foreclosure arena........

Ron S. · Answer

I'm suspicious of your recollection of how it works. You brought cashiers checks, to the foreclosure sale, with the intent to stop the sale? I can tell you that isn't how California foreclosure sales work. I can tell you if you are not an attorney you would be running afoul of California foreclosure consultant registration laws if you applied your scenario to a borrower in foreclosure. I can tell you that the borrower has no legal right to reinstate the loan at the courthouse steps. I can tell you a reinstatement and a payoff quote come from the same department in a bank and, follow the same parameters per federal rule.Maybe it's pulling off a touch down with 1 minute to go but sounds like maybe scoring on the wrong end of the field. Maybe you meant something different or maybe this is a tactic for a different state or, maybe I just misunderstood what you were trying to say.

Which states have laws against door knocking Pre-foreclosues?

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