newbie in north carolina with pre-foreclosure and foreclosure questions

[Chris Purvis]

I just started in the real estate industry in july. I still work a full time job but have recently taken action in real estate by enlisting the help of a bird dog. He brought me about 6 properties that he found at the court house. The houses are in various stages of foreclosure or pre-foreclosure. I believe they are mostly vacant. 

What do I do with these leads or any vacant property that I come across for that matter?  I mostly want to wholesale to raise some capital and I also would like to hold properties to rent out. I also want to eventually do at least one fix and flip.

On a personal note, my wife and I went through foreclosure a few years ago (We do want our own home again, btw. At discount would be great) so I want to help other people before they get to foreclosure.

 If they want to stay in their house how do I help them do that? Are there any resources I can refer them to?

[Chris Martin]

I am not an attorney. I can read the document just like you did and come to some conclusion based on what I perceive as "applicable".

Regarding the first bullet in your post, remember that 75-5A is a single Article within the NCGS. If you were to wholesale a property in default, and the applicable requirements of 75-5A were not met, clearly you would open yourself up to liability on a few different fronts. If, as you suggest, clause 75-120.3(d) (which is seller "...retains an interest in the property conveyed...") is *not* met, then by definition your contract would not constitute a Foreclosure rescue transaction. But one day of post-closing possession... and your 75-120.3(d) "shield" is out the window. All it would take is someone (like a disgruntled owner) to bellyache to the right person to initiate a legal remedy for your alleged violation. Remember you are dealing with someone potentially facing a forced sale in a non-market based transaction. District court judges and defense attorneys know the contracts investors create are not between "ready, willing, and able" participants. This is fact and changes the equation regarding your defense, from their notarized signature (NCGS 10B-40(a2)(2)) to the possible plaintiff claim of a fraudulent transfer (NCGS 39-23.4) and what "reasonably equivalent value" and "value of the asset at the time of the transfer" mean. Attorneys for the plaintiff (who may have been recommended by HUD housing counseling per 24 CFR Part 214 http://www.hud.gov/offices/hsg/sfh/hcc/final.pdf ) may throw all kinds of stuff at you.

If you execute a contract that does *not* meet 75-5A (is not a Foreclosure rescue transaction) but you don't close and that owner ends up with a recorded foreclosure, I could also see that disgruntled owner going after you. The basis for a suit may be for specific performance or violation of 93A-2 http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_93A/GS_93A-2.html
(unlicensed brokering), which could result in a class 1 misdemeanor... meaning no jail time for a first offender, but civil penalties may apply.

My only point... I would not want to be a "wholesaler" who failed to close a contract for a disgruntled owner who was in default and facing foreclosure. Disclosure: I don't 'wholesale'.

As for the second bullet, if you buy "subject to" then "the transferor retains an interest in the property..." because the mortgage remains, and you are subject to the provisions of 75-5A. So, yes, the provisions for an appraisal and 75-121(a) would apply. 

This post is for entertainment purposes only and not to be construed as legal advice applicable under NCGS 84-2.1 Seek legal help for your particular case.