Lis Pendens from nowhere

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Lis Pendens from nowhere

Lubasha White
Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes

Please anyone with experience of buying foreclosures could you help with advice in this situation?

I bought SFH in March at foreclosure auction and got certificate of title on this property. Several days ago I started to receive offers from attorneys to defend it from foreclosure. Checked in public records and indeed, found that in April someone filed Lis Pendens against of my property. From further research I figured out this record refers to mortgage done in 1993 by lender different from one that foreclosed on this house. However, that lender is not in the picture of threatening me to foreclose on my property but successor (?) who just bought the paper from him.

My question is: does second mortgage wiped out by first in foreclosure auction sale, or it has ground in court for whatever reason?

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y

@Lubasha WhiteTalk to an attorney/title co.  You need to first determine if the new lender foreclosing is junior to the one where you bought the property.  If so you're pretty good.  Secondly, see if this other lender was named/served as defendant in the original foreclosure.  If so, done deal and the current foreclosing lender will have to dismiss.  They may not know they were foreclosed out, if they bought the note without doing good homework.  If this lender is junior, but was Not named as a defendant, not the end of the world.  An attorney can reopen the foreclosure and haven them foreclosed out without having to start the whole process over.

BUT.....since you say the currently foreclosing lender is from a 1993 mortgage, I'm guessing it is Not a second mortgage, not as to recording timelines anyway.  But maybe there was a subordination done at the time the mortgage which was foreclosed on, was originated.  Check the mortgage document online which caused the foreclosure auction you bought from, looking for a subordination from the lender now foreclosing.

@Lew Payne I'd be surprised if that holds up here, without a mortgage, since a Note gives you no security in the real estate, or the right to foreclose.  Getting a judgment would create a lien, but prior to that, I don't think so.

@Jay Hinrichs Judicial proceedings only here, no Notice Of Default option, that I know of.  LP with the accompanying complaint to foreclose (law suit).

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Thank you Patrick,

    You give me constructive idea and this is a hope.

    I will contact Straus & Eisler P.A. strauseisler.com during the day and keep everyone posted.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    @Lubasha White The problem is, an LLC or Corporation can only be represented by an attorney in a court proceeding, not one of the individual members. Have an attorney contact them for a pay off.

    1Reply
  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Thank you Wayne,

    I will check it out! Should run this time and be back afternoon.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Lubasha White:

    Could you please let me know if I have right to defend my interest on my own without having attorney involved? 

    I understand you'd like to save a little bit of money by not using an attorney but I promise it's money well spent when you're not an expert in the field and as Wayne said a corporation cannot represent itself in a legal case.  You will need an attorney and I PM'ed a couple of great local ones, call and ask to setup a consolation appointment.   

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    @Patrick L.  "...consolation appointment"...Freudian auto correct, gotta love it.

    2Reply
  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y
    Originally posted by @Lubasha White:

    Dion DePaoli,

    "As far as they are concerned, you do not exist".

    I understand what you mean, but problem is that I do exist and I have my interest in this case. If I would stay uninformed this law would run me over and I disagree that it is nothing wrong with that. More to it, I think it is ugly and not standing even near with democracy we are the people fighting for.

    But I thank you so much for your eyes opening wisdom and will try my best to resolve this issue. As I mentioned before I contacted the office in Miami already and got answer that they will interact only with attorney, not me personally. I have a hard time to understand why I cannot defend my interest on my own and wish to look around if there is a way for me to cut bleeding. 

    Could you please let me know if I have right to defend my interest on my own without having attorney involved? 

    Again, I admire your knowledge and appreciate your help so much. 

     
    Lubasha

    My choice of words was meant to make a point which, while you say you understand, you are not illustrating you get it.  That is the part which concerns me.  As @Wayne Brooks

    mentions the property you purchased has title vested in an LLC. That LLC is the defendant not you as a natural person. While you may have power to direct the LLC as it's Manager legally you do not get to represent yourself since you are not an attorney. The plaintiff's attorney has no obligation to deal with you. Had you not vested title in the LLC but rather you natural name, you would be in a different spot however, the plaintiff's attorney is not yours and they would still require you to proceed through the court or get an attorney. That is how our legal system works.

    The whole not democratic idea you tossed out there is fairly off base.  First and foremost, the purchase of a property at a foreclosure auction is typically under the idea of Buyer Beware.  The Buyer is responsible for their own due diligence whether that Buyer conducts due diligence or not.  In this case 'proper' due diligence would have shown this open mortgage and that means your interest would have been inferior.  Since the mortgage is perfected (meaning recorded) it fair to assume that you could have found it had you looked properly.  

    Secondly, this is not a "taking".  In other words, you do not automatically loose the property because your interest is inferior to the foreclosing mortgage.  Judicial foreclosure is based upon the idea of equity -  which can be read as "fairness".  In fairness, you have a right to redeem the property by paying those amounts due under the foreclosing entities note.  Adversely, in fairness to the Mortgagee, if they are not paid in full they have a right to enforce the security instrument and ask a court to order a judicial sale which is the auction.

    The moral of the story judicial foreclosures, which is what you are gong through is really one of the most "fair" things we have in our legal structure.  Neither the plaintiff nor the defendant has superior legal rights to each other and the court administers based on statue statue.  That statue or body of law is the direct outcome of our legal framework.  So, to say it again, it is pretty darn impossible to imagine how it could be 'more fair'.  

    I do not wish to spend a bunch more time on this.  I have said it once or twice now, do not approach this as some type of mistake that you can clear up.  No offense, but you do not get it and that doesn't lead me to rationally expect you to find any potential defenses to the Mortgagee's claims of interest in the real property.  

    One last time you have two options right now, clear as day:

    1.  Pay the amounts due to the Mortgagee which satisfies their lien and in turn the property will be yours.  (provided there are no other superior interests to yours surviving)
    2.  Obtain legal counsel and have them attempt to defend you.  Understand this will cost a couple thousand dollars.  Also understand, you are not a Borrower in this loan so you have no defense as a Borrower.  This is ultimately very simple, if the Mortgagee's secured interest is indeed superior to your real property interest you can not "win".  That is fundamentally all the Mortgagee has to do....prove their superior to you.  As details in this thread have flushed out and your LLC is named operate from an assumption the plaintiff's attorney likely already has that covered.  Otherwise it probably would not have been filed.

    I wish you luck.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Wayne Brooks:

    @Patrick L.  "...consolation appointment"...Freudian auto correct, gotta love it.

     LOL I guess she should ask for a consultation with a side order of consolation.  

    She's actually pretty fortunate that she didn't get bid up more in that auction.  I don't know what her max bid was going to be but it only takes 2 bidders to drive a second up to full value on the property.  In this case the auction ended up somewhere around 50% of market value.   I guess some people see the high judgement amount and assume it's a 1st without doing any title research.  

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Dion DePaoli:

    4.  OP as property owner has a right of redemption up to foreclosure auction.  There is zero fire drill here.  There is NO default time.  There is no other window of time that matters.

    Well good.  If there is no fire drill, I'll go make my 2nd coffee.  

    I apologize for introducing the concept of SOL on notes into the thread.  I was assuming that the foreclosing loan might be very old and that the lender was not collecting. Once it was revealed that Wells owned the note, I doubted that the foreclosure action was anything but legit and that the loan is in first position.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:
    Originally posted by @Lubasha White:

    Oh guys, you are great! I am so amazed with your knowledge!

    Knowledge is the only thing that works but another only thing it is so hard to find.  Yes I will look attorneys for plaintiff, just checked the LP file and see their names and number! What is surprising, I probably saw the area code of that # in my incoming calls, but ignored it like someone who dialed wrong number!

    Will call first thing when working hours begin in the morning!

    Have a very good night everyone!

     It's a small, 2 attorney, firm (Straus & Eisler P.A.  strauseisler.com) handling the case for the Plaintiff.  The case will move a lot more swiftly than one of the large foreclosure firms in FL but it should be far easier to get a hold of someone and get this straightened out if you intend to pay it off in full (which will be principal, unpiad interest, late fees, attorneys fees, court costs, lender paid taxes/insurance/property preservation, etc)

     Patrick:  Should the OP expect the pay off to be a much higher number than what's listed on the complaint? My experience with non judicial foreclosures is that the additional fees are somewhat reasonable.  But you have court and attorney fee's in FL that have to be added.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Account Closed:

     Patrick:  Should the OP expect the pay off to be a much higher number than what's listed on the complaint? My experience with non judicial foreclosures is that the additional fees are somewhat reasonable.  But you have court and attorney fee's in FL that have to be added.

     Attorneys fees on an uncontested case are probably going to be $1,200-1,500.  This was a sub $50k claim so the filing fee is only $400 (jumps to $905 for 50-250k and all the way to $1905 for $250k+).  Maybe another $500 service of process on the case (5 defendants).   If the OP is just referencing the unpaid balance demand the number could certainly be a lot higher because there is going to be unpaid interest, late fees, lender paid taxes/insurance, property inspections/preservation, title search, etc.   The earlier in the case you catch it the lower these are all going to be, by the end of a foreclosure that takes years to complete you can see cases where the additional charges are more than 50% of the unpaid balance.  

    Here's a sample judgement from public records for one of tomorrow's auctions. $94k UPB turned into $158k.

    http://www.docdroid.net/yyai/null.pdf.html

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:
    Originally posted by @Account Closed:

     Patrick:  Should the OP expect the pay off to be a much higher number than what's listed on the complaint? My experience with non judicial foreclosures is that the additional fees are somewhat reasonable.  But you have court and attorney fee's in FL that have to be added.

     Attorneys fees on an uncontested case are probably going to be $1,200-1,500.  This was a sub $50k claim so the filing fee is only $400 (jumps to $905 for 50-250k and all the way to $1905 for $250k+).  Maybe another $500 service of process on the case (5 defendants).   If the OP is just referencing the unpaid balance demand the number could certainly be a lot higher because there is going to be unpaid interest, late fees, lender paid taxes/insurance, property inspections/preservation, title search, etc.   The earlier in the case you catch it the lower these are all going to be, by the end of a foreclosure that takes years to complete you can see cases where the additional charges are more than 50% of the unpaid balance.  

    Here's a sample judgement from public records for one of tomorrow's auctions. $94k UPB turned into $158k.

    http://www.docdroid.net/yyai/null.pdf.html

    Yeah, that's what I was wondering. Thanks.  

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  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y

    LubashaI glanced back through this and wanted to address a question you poised earlier.

    As it stands now per this thread, your LLC has an interest in the real property as an owner. That is what the CT gives you. Since you hold that interest in the real property you have a right to redeem. Bayview can not deny you redeeming the property. So yes, if you just pay what is owed to them it is all over. So as not to confuse the parties, you need to act from your LLC not your natural person. The LLC is what has the right to redeem.

    It sort of sounds like the payoff is in the church of $64k +/-.  The LLC can inquire with Bayview for a payoff statement which they must deliver within 7 days.  The request needs to be made in writing and you should explain the LLC's property interest, you can attach the CT and then explain you are the manager of the LLC.  Something like (for example purposes only):

    "I Lubasha White, as Managing Member of [MY CO, LLC] (what ever the name is) with an address of 123 Main Street Miami, FL 331212 formally request a payoff statement for the mortgage securing 234 Subject Property Street Orlando, FL 23232 being serviced by Bayview Loan Servicing, INC (?).  I am enclosing a copy of the County Clerk's Certificate of Title vested in our name to demonstrate our interests.  

    Please forward the payoff statement to my email [email protected] and/or 4545 This Street Tampa, FL 54789.  Please contact me directly with any questions at (555) 555-1212."

    If you want you can go to Sunbiz.org and print off a copy of your LLC to show you are the Managing Member.  It won't hurt to make sure the communication leaves no doubt as to who you are and your right to the information and redemption.

    The payoff number is the number to pay.  It can be contested but understand contesting that number will also require an attorney and court proceedings.  

    It is too bad this is going this way for you.  Not a fun way to learn about these things.  Good luck.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    @Patrick L. and @Wayne Brooks  Just one more question about FL foreclosures.  If the property sells for more at foreclosure sale than what is due, there would an overage due to Lubasha, correct?  

    Patrick:  you've looked at the numbers.  Is there any equity, will the property be bid up at sale?  If so, shouldn't Lubasha be weighing whether or not to payoff the senior lien vs. possibly recovering some of her loss as an overage by letting it go to sale?

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y

    @Account Closed Assuming there are no other liens or judgements ahead of her in priority she could be entitled to a surplus. The issue with doing that is you aren't maximizing your equity in the property because the plaintiff will continue to rack up fees/costs that will get rolled into the final judgement. The foreclosure auctions here are very competitive but I would still expect the property to sell at a discount below market value. It's a huge gamble because I've seen properties go for 50% of FMV and others go for more than 100%, it all depends on who is bidding and how desirable the property is.

    I believe the property is worth about $35k more than what she paid so there is equity left to pay off that 1st and still walk away whole or at least close to it.  Granted that's my rough assessment without doing any in person evaluation of the property, just an estimate looking at the comps.   In my opinion if you can make a major mistake like buying a 2nd thinking it's a 1st and still break even then that's a huge win.  

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:

    @Account Closed Assuming there are no other liens or judgements ahead of her in priority she could be entitled to a surplus. The issue with doing that is you aren't maximizing your equity in the property because the plaintiff will continue to rack up fees/costs that will get rolled into the final judgement. The foreclosure auctions here are very competitive but I would still expect the property to sell at a discount below market value. It's a huge gamble because I've seen properties go for 50% of FMV and others go for more than 100%, it all depends on who is bidding and how desirable the property is.

    I believe the property is worth about $35k more than what she paid so there is equity left to pay off that 1st and still walk away whole or at least close to it.  Granted that's my rough assessment without doing any in person evaluation of the property, just an estimate looking at the comps.  

    Thanks for the info.  Dion's assessment is that she owes $68K? Or did I misunderstand that?

    In your opinion, could she market it and sell it now, before more foreclosure costs rack up and get proceeds instead of break even?

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Account Closed:

    Thanks for the info.  Dion's assessment is that she owes $68K? Or did I misunderstand that?

    In your opinion, could she market it and sell it now, before more foreclosure costs rack up and get proceeds instead of break even?

     Dion did throw that number out but I'm not really sure where it came from.  The original principal balance was  $40k in 1993 so assuming it was paid for 20 years before defaulting that would have knocked it down to $20k before you start adding back in interest, costs and fees.  

    She could definitely try to sell it now and pay off the 1st at closing.  It's still early in the foreclosure case so she has time to do that.  

    I don't mind helping people out but she definitely came here with a "poor me" attitude pleading ignorance but in here in Pinellas County she's bought 12 properties and resold 9 of them at a profit (and still holds the other 3).  Most of the purchases were foreclosure sale or tax deed auction so there's not really an excuse to not know what you're bidding on at that point.

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Dion, I cannot express enough my appreciation for your help. Thanks for being great human and mentor.

    I know that I cannot represent my company myself; I had experience in past when I was forced to learn it and you reminded me that time. I had happy end then because attorney who took my case was super effective and great person. By the way he is the same person Patrick recommended to me.

    About property value and proceeds available for me:

    The property is in extremely poor shape and needs tones of work. I already did some work at very high cost. I am thinking if it make sense for me to let this property go to the next foreclosure and put my own lien on it with all the costs I already have with it. This is absolutely not what I would like to do but it might be better then to go broke and miserable.

    So what would be your vision folks to this scenario?

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Patrick,

    Your data is not quite correct and simply out of touch with reality. You see the numbers but you don't know what's behind  and I don't think you are fine with posting my personal info on public site without any regards of my own. PLEASE,  stop!

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Lubasha White:

    Dion, I cannot express enough my appreciation for your help. Thanks for being great human and mentor.

    I know that I cannot represent my company myself; I had experience in past when I was forced to learn it and you reminded me that time. I had happy end then because attorney who took my case was super effective and great person. By the way he is the same person Patrick recommended to me.

    About property value and proceeds available for me:

    The property is in extremely poor shape and needs tones of work. I already did some work at very high cost. I am thinking if it make sense for me to let this property go to the next foreclosure and put my own lien on it with all the costs I already have with it. This is absolutely not what I would like to do but it might be better then to go broke and miserable.

    So what would be your vision folks to this scenario?

    What are you talking about? How do you propose to put a lien on a property you own? Have a separate entity file a mechanic's lien against your LLC?

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:
    Originally posted by @Account Closed:

    Thanks for the info.  Dion's assessment is that she owes $68K? Or did I misunderstand that?

    In your opinion, could she market it and sell it now, before more foreclosure costs rack up and get proceeds instead of break even?

     Dion did throw that number out but I'm not really sure where it came from.  The original principal balance was  $40k in 1993 so assuming it was paid for 20 years before defaulting that would have knocked it down to $20k before you start adding back in interest, costs and fees.  

    She could definitely try to sell it now and pay off the 1st at closing.  It's still early in the foreclosure case so she has time to do that.  

    I don't mind helping people out but she definitely came here with a "poor me" attitude pleading ignorance but in here in Pinellas County she's bought 12 properties and resold 9 of them at a profit (and still holds the other 3).  Most of the purchases were foreclosure sale or tax deed auction so there's not really an excuse to not know what you're bidding on at that point.

     Well, if it were me, I'd be concerned about throwing good money after bad by paying off the senior lien.  If I thought I could sell it now at break even or better, I would.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Lubasha White:

    Patrick,

    Your data is not quite correct and simply out of touch with reality. You see the numbers but you don't know what's behind  and I don't think you are fine with posting my personal info on public site without any regards of my own. PLEASE,  stop!

     I have actually been careful not to post exact numbers (other than the loan amounts, which was the main issue that the thread was about), addresses, or anything else too identifying.  Yes, I don't know the true numbers on the ones you bought and sold because obviously I can't see what you did to them in the time between buying and selling.  I saw many of them were turned fairly quickly so I didn't think you were doing big rehabs on them.  I also just took a quick glance at the public records and didn't waste too much time digging into it because that wasn't the point of this thread. My main point with that was that you have bought and sold a number of properties and most of your purchases were through "buyer beware" type sales so at this point you should be capable of doing your due diligence about what you are buying.   I have spent a good bit of time trying to help you understand your situation.

    0Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Lubasha White:

    About property value and proceeds available for me:

    The property is in extremely poor shape and needs tones of work. I already did some work at very high cost. I am thinking if it make sense for me to let this property go to the next foreclosure and put my own lien on it with all the costs I already have with it. This is absolutely not what I would like to do but it might be better then to go broke and miserable.

    So what would be your vision folks to this scenario?

     I see you have a roof permit, did you do work beyond that?  Is there major damage inside from the roof leak? Were you aware of the condition of the property prior to purchasing it?   I would get the payoff amount before I proceeded with anything else.  If you can sell it right now for more than that payoff then you will recoup some of your money.  If you let it sit and deteriorate further and rack up costs/fees you will lower the amount you get in the end.  The "equity" value I tossed it was if the house was in average condition, I haven't been there so I can't give a more detailed assessment.  

    0Reply
  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    I don't know yet. But I know what Bayview is doing might be straight with the law but curved with humanity. They let property to foreclose by junior lien holder and came out from bushes to grab the victim by it's throat taking advantage of being in possession of all related info, while victim could not have this opportunity simply by virtue of reality.

    But yes, I am thinking, what can stop me to put a lien on my property since I am losing it? All my expenses are real as loss I am taking this time.

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    Bayview's mortgage was there in the public records for anyone to see...anyone who took the time to look.  Nothing underhanded here.  You're the owner now, if it goes to foreclosure you're entitled to any overage that's bid.  If the judgment ends up at say $36k, and it sells for the $56k, you get the extra $20k.  An "owner" isn't entitled a "lien" on their own property, just a dumb idea.

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y
    Originally posted by @Lubasha White:

    I don't know yet. But I know what Bayview is doing might be straight with the law but curved with humanity. They let property to foreclose by junior lien holder and came out from bushes to grab the victim by it's throat taking advantage of being in possession of all related info, while victim could not have this opportunity simply by virtue of reality.

    But yes, I am thinking, what can stop me to put a lien on my property since I am losing it? All my expenses are real as loss I am taking this time.

    This post I addressed to Marie, sorry I did not mention it in headline.

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