zombie deed help

14 Replies

I found a house that has clearly been abandoned. I did my research and I found the last owner through the county assessor. The deed states that "Jarrod" and his now ex-wife "Julie" are the owners. When I contacted Julie she said "I gave that house back to the bank years ago, after my bankruptcy was discharged". I went to the county recorder and got the paperwork on the property, which happens to be in an extremely rural area and it shows that foreclosure was started, and then in Feb 2014 a Withdrawal of notice of foreclosure was sent to public trustee, and accepted by the public trustee in April 2014.

Obviously the owners had no idea that the foreclosure stopped. Julie actually had someone interested in buying the house about a year ago and contacted the company that has the loan(ocwen), to see how these people could buy it, and they refused to speak with her about it. So now I have several questions because I want to live in this house!

1. Can Jarrod and/or Julie rent this house out to someone?

2. Can Jarrod and/or Julie sell this house?

3. If they can do either of these things what are the steps they need to take to do it?

4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?

5. If they can/do rent this house out, what can be expected in the future from the finance company? Can the finance company start foreclosure proceedings again in the future?

6. From what I'm reading online, Jarrod(if he filed BK too) and Julie, may just own this house free and clear now because of the BK and foreclosure withdrawal. Is this correct or am I confused?

Originally posted by @Wayne Brooks :

4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?

     Here a couple of additional questions about #4 that I have.

     1. Could Julie and/or Jarod deed the house over to someone else?

Originally posted by @Wayne Brooks :

1 yes

2 by short sale, with ocwen approval

3 just rent it

4 no

5 yes

6 confused.  Bk, or a foreclosure withdrawal, does Not affect a mortgage.

On #2...how do we know the house is upside down and requires a short sale?  I see lots of properties abandoned by trustees that have equity, at least enough so that a sub2 might make sense.  But not enough that the trustee will go after it.  In a Ch. 7 the BK trustee is working for peanuts.  They do as little as possible IMO.

Send me Jarrod and Julie's names and I'll look at the BK.  I'm betting it was Ch. 7 and that the trustee "abandoned" the  "asset".  

Jarrod and Julie do not own the house free and clear.  If they did, the BK trustee would have sold it to pay the creditors.  The foreclosure is often delayed by a BK filing, but the lender is still entitled to a foreclosure sale and/or the collateral if the loan is not paid.  BK does not eliminate secured mortgage debt. (There are some exceptions but pretty sure this isn't one of them).  

Originally posted by @William J Hamm :
Originally posted by @Wayne Brooks:

4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?

     Here a couple of additional questions about #4 that I have.

     1. Could Julie and/or Jarod deed the house over to someone else?

 Yes!  Depending on the debt and the lender and the foreclosure time frame, it might make sense to get the deed.  I love me some post BK sub2 deeds.

I know a few investors in the KC market that deal primarily in these Zombie Titles and they are using a buy and hold strategy while basically waiting for something bad to happen with the title.  They are looking at them as extremely high risk high reward deals because with the bank(s) basically abandoning the properties the investors are getting quit claim deeds and doing minor repairs and renting the properties out with $0 mortgage payments.  It's extremely risky, but if you can cashflow a property for a couple of years before you basically have to give the house back it's a deal they are willing to do.  Haven't done one personally, but I'm close to these investors and it seems to be working well for them

Trustee seems to have dropped the ball. Not surprising. Ocwen.

Regarding "4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?" You can pay off their loan... whatever is owed plus trustee and court costs (if applicable). At some point the trustee will wake up. Foreclosure "withdrawal?" Not sure what that is in your state code, but the lien is still in force and without knowing/seeing the foreclosure file, it's hard to know if this is an opportunity worth pursing.  

Kristine Marie Poe Yes, assuming it's upside down as that's the cause for most personal BK's these days, and I'd think the trustee would have sold it ifthere was any equity.  But, who knows.

Originally posted by @Chris Martin :

Trustee seems to have dropped the ball. Not surprising. Ocwen.

Regarding "4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?" You can pay off their loan... whatever is owed plus trustee and court costs (if applicable). At some point the trustee will wake up. Foreclosure "withdrawal?" Not sure what that is in your state code, but the lien is still in force and without knowing/seeing the foreclosure file, it's hard to know if this is an opportunity worth pursing.  

I don't see a trustee problem, rather a lender problem.  Is that what you meant?  It's Ocwen's job to get a lift of stay and/or know when the BK was discharged so they can foreclose.

As for the zombie deed thing, that's never been that interesting to me. Academically, yes, but not so much in practice. I'll get a deed because I think I can negotiate a discount, or keeping the payment current will cash flow or the payoff makes sense.  All sub2s have risk but the cash flow only play on an upside down property doesn't sound that fun to me.

Originally posted by @Account Closed :
Originally posted by @Chris Martin:

Trustee seems to have dropped the ball. Not surprising. Ocwen.

Regarding "4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?" You can pay off their loan... whatever is owed plus trustee and court costs (if applicable). At some point the trustee will wake up. Foreclosure "withdrawal?" Not sure what that is in your state code, but the lien is still in force and without knowing/seeing the foreclosure file, it's hard to know if this is an opportunity worth pursing.  

I don't see a trustee problem, rather a lender problem.  Is that what you meant?  It's Ocwen's job to get a lift of stay and/or know when the BK was discharged so they can foreclose.

As for the zombie deed thing, that's never been that interesting to me. Academically, yes, but not so much in practice. I'll get a deed because I think I can negotiate a discount, or keeping the payment current will cash flow or the payoff makes sense.  All sub2s have risk but the cash flow only play on an upside down property doesn't sound that fun to me.

 More Research on this found the following:

The individual (Carl) currently listed on the deed would like to get his name off the deed if possible. Carl said that the bank tried to short sale the property 2 different times for $140k but the short sales fell through. He did have any details on why or who the bank was trying to short sale too. Houses in the area of the vacant house with about the same features and size sell for $240k to $280k. Knowing the short sale amount and knowing the potential ARV does peak my interest even more on the risk to reward. If the risk is that I eventually buy the house for $140k or lower then I would accept that risk. Thoughts?

Theory:

Would it make sense to have the property deeded to a land trust instead of an individual for a layer of protection?  While in the land trust, the property could be maintained and rented until the bank makes a move.  Let the pros chime in on this theory.

Originally posted by @William J Hamm :
Originally posted by @K. Marie Poe:
Originally posted by @Chris Martin:

Trustee seems to have dropped the ball. Not surprising. Ocwen.

Regarding "4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?" You can pay off their loan... whatever is owed plus trustee and court costs (if applicable). At some point the trustee will wake up. Foreclosure "withdrawal?" Not sure what that is in your state code, but the lien is still in force and without knowing/seeing the foreclosure file, it's hard to know if this is an opportunity worth pursing.  

I don't see a trustee problem, rather a lender problem.  Is that what you meant?  It's Ocwen's job to get a lift of stay and/or know when the BK was discharged so they can foreclose.

As for the zombie deed thing, that's never been that interesting to me. Academically, yes, but not so much in practice. I'll get a deed because I think I can negotiate a discount, or keeping the payment current will cash flow or the payoff makes sense.  All sub2s have risk but the cash flow only play on an upside down property doesn't sound that fun to me.

 More Research on this found the following:

The individual (Carl) currently listed on the deed would like to get his name off the deed if possible. Carl said that the bank tried to short sale the property 2 different times for $140k but the short sales fell through. He did have any details on why or who the bank was trying to short sale too. Houses in the area of the vacant house with about the same features and size sell for $240k to $280k. Knowing the short sale amount and knowing the potential ARV does peak my interest even more on the risk to reward. If the risk is that I eventually buy the house for $140k or lower then I would accept that risk. Thoughts?

Theory:

Would it make sense to have the property deeded to a land trust instead of an individual for a layer of protection?  While in the land trust, the property could be maintained and rented until the bank makes a move.  Let the pros chime in on this theory.

I'm confused.  What happened to the OP's Jarrod and Julie and the property included in Julie's BK? Is this a different property?  What state?

Banks don't short sale properties.  Only sellers can list and sell, with the help of agents.  They try to find a buyer at a price and terms acceptable to the lender.  Then the lender accepts the pay off or not.  

Lenders expect the listing agent to give them honest comps and bring them a third party buyer that can close.  It sounds like Carl doesn't really know what's going on.

Originally posted by Kristine Marie Poe:
Originally posted by @William J Hamm:
Originally posted by Kristine Marie Poe:
Originally posted by @Chris Martin:

Trustee seems to have dropped the ball. Not surprising. Ocwen.

Regarding "4. Since ocwen refuses too talk to them, is there anything I can do to take ownership of this home?" You can pay off their loan... whatever is owed plus trustee and court costs (if applicable). At some point the trustee will wake up. Foreclosure "withdrawal?" Not sure what that is in your state code, but the lien is still in force and without knowing/seeing the foreclosure file, it's hard to know if this is an opportunity worth pursing.  

I don't see a trustee problem, rather a lender problem.  Is that what you meant?  It's Ocwen's job to get a lift of stay and/or know when the BK was discharged so they can foreclose.

As for the zombie deed thing, that's never been that interesting to me. Academically, yes, but not so much in practice. I'll get a deed because I think I can negotiate a discount, or keeping the payment current will cash flow or the payoff makes sense.  All sub2s have risk but the cash flow only play on an upside down property doesn't sound that fun to me.

 More Research on this found the following:

The individual (Carl) currently listed on the deed would like to get his name off the deed if possible. Carl said that the bank tried to short sale the property 2 different times for $140k but the short sales fell through. He did have any details on why or who the bank was trying to short sale too. Houses in the area of the vacant house with about the same features and size sell for $240k to $280k. Knowing the short sale amount and knowing the potential ARV does peak my interest even more on the risk to reward. If the risk is that I eventually buy the house for $140k or lower then I would accept that risk. Thoughts?

Theory:

Would it make sense to have the property deeded to a land trust instead of an individual for a layer of protection?  While in the land trust, the property could be maintained and rented until the bank makes a move.  Let the pros chime in on this theory.

I'm confused.  What happened to the OP's Jarrod and Julie and the property included in Julie's BK? Is this a different property?  What state?

Banks don't short sale properties.  Only sellers can list and sell, with the help of agents.  They try to find a buyer at a price and terms acceptable to the lender.  Then the lender accepts the pay off or not.  

Lenders expect the listing agent to give them honest comps and bring them a third party buyer that can close.  It sounds like Carl doesn't really know what's going on.

Not the same property! One time poster "Freedom" posted and poofed.