anatomy of lis pendens - questions on process

anatomy of lis pendens - questions on process

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

I found a property today in a highly rentable area. I pass this house enough that I thought it strange it was not rented or had a for rent sign. Today I walked up on the property after seeing a paper posted on the window. I've seen enough of these from a distance to know it had to be some sort of seizure.

The notice said that the property had been deemed vacant or abandoned. I peeked inside to find a disarray of items strewn about in the front room. I've never seen any vehicles so I do believe it is abandoned.

I did some research and found a lis pendens filed on 8/19/2015. Prior to that this year one of the owners passed away. This leave the other two, I suspect, to deal with the property. The property had a current 1st mortgage of at least $151k. I'm guessing since their is no release I could find for the filed mortgage back in 2006. Did some simple math based on the purchase and date so the $151 is a rough figure. The owners have never lived in it as there has never been an exemption. They rented it for sure.

It doesn't look like there are any tax certificates but I need to verify that with the tax office.

For those that deal in foreclosure, I realize the lis pendes is the first step, what do I need to do to see about getting this property. At the very least, seeing the inside and getting in touch with the right people whether it's the owners or the bank or the attorney on the filed lis pendens.

Do I wait for this to run it's course that it gets to the foreclosure or is there something I can do now?

thanks....

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

10y

@Daria B. Huh? There is No equity if the property is worth $115k or so, and the loan balance is $151k....it's upside down $35k or so, and is a definite short sale. Equity is the spread that the house value is Greater than the mortgage balance, which creates some "value".

There IS a case number somewhere near the top of the recorded LP, and it looks like mentioned above.

See this reply in the discussion

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Account Closed
Property Manager · Baton Rouge, LA · Member since 2014 · 2k+ posts · 195 votes
10y
The Heirs of the owner that passed away, needs to open succession and deal with you to buy their interest, now add the cost of what the Heirs want, living people with interest and to pay off the Bank, if too high, waiting on the Bank to foreclose and buy at foreclosure sale may be the only route to a successful deal.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
@Account Closed
Is it best to wait for the foreclosure? At this point it if the other co-owners have not moved to sell then they are waiting out for the bank to foreclose.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
First question, is there any equity? If so, contact the other two on title. A probate may or may not be required depending on if one of the current title holders is the spouse of the deceased. You'll need to verify the Mtg balance as is could have increased tens of thousands for taxes, insurance, etc, etc. depending on how long it has been in default. The bank has no say so in selling it now, they don't own it, unless you're seeking their approval for a short sale.
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Jeff B.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
10y
Lis Pendens is a non-judicial foreclosure, will have three NODs and the last step is NTS (notice of sale). The entity foreclosing is on each document. Due to other living persons on the deed, a short sale is impossible, but the auction is final regardless.
You will not get access before the auction, so your interest is constrained to the value of the note being foreclosed and the FMV of the property - - and then you're guessing at as-is value vs ARV and your efforts to rehab.

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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
10y
Are you sure the lis pendens is related to a foreclosure? If there has been a death of an owner, I can think of several reasons why a lis pendens might have been filed.
Lis pendens is a legal method to cloud title by filing notice of on going litigation relating to real property in deed records.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
Originally posted by @Account Closed:

Are you sure the lis pendens is related to a foreclosure? If there has been a death of an owner, I can think of several reasons why a lis pendens might have been filed.
Lis pendens is a legal method to cloud title by filing notice of on going litigation relating to real property in deed records.
I'm still learning about this process. I was not aware that it could be related to something other than foreclosing.
What did you mean by "legal method to cloud title.....etc"?
i have a copy of the lis pendens that was filed. Not sure what it says as I don't speak legalese.
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
10y
Does it mention, a legal case? It might give a case number or it might give how the case is styled. For example Wells Fargo v. Jane Doe in the 380th District Court of the State of...
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David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
10y
Originally posted by @Jeff B.:

Lis Pendens is a non-judicial foreclosure, will have three NODs and the last step is NTS (notice of sale). The entity foreclosing is on each document. Due to other living persons on the deed, a short sale is impossible, but the auction is final regardless.
You will not get access before the auction, so your interest is constrained to the value of the note being foreclosed and the FMV of the property - - and then you're guessing at as-is value vs ARV and your efforts to rehab.

Oops! Lis Pendens - Latin for "Litigation Pending" - *IS* judicial foreclosure. Notice of Default is non-judicial. The next public notice after the Lis Pendens will be the Notice of Sale at Auction.
A short sale may still be possible if the property is held in trust. The heirs would need to pursue certain actions with their attorney first.
If you can contact the heirs, you may be able to access the property if they are willing to cure the default to halt the foreclosure proceedings.
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Rick H.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
Originally posted by @David Dachtera:

Originally posted by @Jeff B.:
Lis Pendens is a non-judicial foreclosure, will have three NODs and the last step is NTS (notice of sale). The entity foreclosing is on each document. Due to other living persons on the deed, a short sale is impossible, but the auction is final regardless.
You will not get access before the auction, so your interest is constrained to the value of the note being foreclosed and the FMV of the property - - and then you're guessing at as-is value vs ARV and your efforts to rehab.

Oops! Lis Pendens - Latin for "Litigation Pending" - *IS* judicial foreclosure. Notice of Default is non-judicial. The next public notice after the Lis Pendens will be the Notice of Sale at Auction.
A short sale may still be possible if the property is held in trust. The heirs would need to pursue certain actions with their attorney first.
If you can contact the heirs, you may be able to access the property if they are willing to cure the default to halt the foreclosure proceedings.
Yep. I was scratching my head, too. That's why a discussion forum is valuable because difference opinions and experiences can be sought.
And we all have the right to be wrong.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
@Daria B. If you read the LP it's fairly clear.....it will state foreclosing on a certain property with a legal description, and may also reference the specific mortgage by book/page no. Also it will have a case no. somewhere near the top, something like Case No. 502015CPoo14968xxxxmb, or something similar. If you then go to your clerk of court "court case search" you can plug in that case no., exactly as it shows, and you can see the case docket.....a time line of actions, motions, scheduled hearings, etc.
As to my earlier question, equity matters because if there is no equity then you're looking to do a short sale, as opposed to getting "a deal" by paying above the Mtg balance, but less than it's worth.
A LP can be for things other than a foreclosure, (like a seller backing out of a contract and the buyer filing an action to cloud the title) but 99% of the time it is a foreclosure.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
@Account Closed yes this is a foreclosure. I looked at the filed document and as you and @Wayne Brooksindicated, it has NATIONSTAR MORTGAGE LLC (plaintiff) vs. {all the names of the owners on record for the house}. There is a property description and prior to that description it says: YOU ARE HEREBY NOTIFIED of the institution of this action by the Plaintiff against you seeking to foreclose a note and mortgage encumbering the following described real property in {county} in Official Record Book nnnn, Page nnnn.
The case number was not included in the filed document. The web site I use needs to have look ups by case number or name. Doesn't allow address searches.
As far as the short sale, it appears that the note is $151k if doing the standard payment based on "very" rough estimates of what I found on the note and mortgage filed papers. Say it is this amount, then there is $37000 in equity so it sounds like a short sale is out of the question. The recent sales in this area for same-type property has been $102k to $125k.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
@Wayne BrooksI found the county clerk page and put in the name of the one owner and it has the docket history. Interesting summary of events for this process.
What does this mean to me? Is there anything I can glean from it?
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
@Daria B. Huh? There is No equity if the property is worth $115k or so, and the loan balance is $151k....it's upside down $35k or so, and is a definite short sale. Equity is the spread that the house value is Greater than the mortgage balance, which creates some "value".
There IS a case number somewhere near the top of the recorded LP, and it looks like mentioned above.
2 Reply
Jeff James
Real Estate Investor · Whiteland, IN · Member since 2014 · 54 posts · 20 votes
10y
@Daria B., I have run into a similar interesting situation when researching whether I wanted to acquire a tax lien ceritificate on a Florida condo and possibly submit a tax deed application/pursue the tax deed at auction. It appears that the HOA began foreclosure for a lien associated with delinquent HOA dues at about the same time that the private lender began foreclosure action for delinquent first position mortgage payments. I don't speak legalease either but my interpretation of events is that the HOA foreclosed first and an auction purchase was made by an LLC. This precipitated a lawsuit filed by the private lender against the HOA, purchasing LLC, and delinquent borrower. It looks like it took two years to litigate and it appears that the private lender prevailed and is now the owner of the property. I would like to know the opinion of the experts out there--if I was to pursue a tax deed for this particular property how difficult will it be to quiet the title? There doesn't appear to be any code enforcement liens on the property. All thoughts are welcome and sorry to hijack the post.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
Originally posted by @Wayne Brooks:

@Daria B. Huh? There is No equity if the property is worth $115k or so, and the loan balance is $151k....it's upside down $35k or so, and is a definite short sale. Equity is the spread that the house value is Greater than the mortgage balance, which creates some "value".
There IS a case number somewhere near the top of the recorded LP, and it looks like mentioned above.
I don't think the house is worth more than $125-$130k. The original note was $188k and I don't know any the balance is but I'm guessing $151k. I don't know many that make extra payments and given they put 5% down, it's not likely they wanted to put out a lot of money during the course of these years.
I think they forgot to put the case no on the document. At the top is the usual document stamp and where the case no is supposed to go, there isn't one. I still found the case records using the owner name.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
@Jeff James None of that affects a buyer at a tax deed auction. But, buying a tax certificate gives you No edge in bidding at the the tax deed auction, you still have to be the high bidder at the tax deed auction. You can easily see the results of the tax deed auctions online.
2 Reply
Jeff James
Real Estate Investor · Whiteland, IN · Member since 2014 · 54 posts · 20 votes
10y
@Wayne Brooks, thanks for your response. I am familiar with Florida's peculiar (at least peculiar to me) tax deed process.
As an investor newbie and legal novice my concern was if I would apply for a tax deed and be the high bidder at the auction would I have to worry that that the LLC that was the successful bidder at the apparently voided HOA foreclosure auction would have the ability to assert a claim against the property. It doesn't make sense to me that it would but real estate law doesn't always make sense to me.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
No, none of that matters. A tax deed auction wipes out owners interest, Mtg.s and HOA debts. But just to be clear, if you want to buy properties, forget buying the tax certificates as they don't help you, just bid at the tax deed auctions.
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Daria B.
OP
Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
10y
@Wayne Brooks at this point knowing that the house is being foreclosed. Can I send a letter to the owner to find out what the balance is to see if doing a short sale would work in acquiring the property?
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Sa Nied
Investor · Tampa , FL · Member since 2011 · 10 posts · 1 vote
10y
Wayne,
A tax deed does NOT wipe out HOA debts in Hillsborough & Pinellas counties... I have been through this many times... It also will NOT remove child support and IRS liens. You have to negotiate those separately. They are all exempt in the counties I mentioned.. Not sure about rest of FL..
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
The HOA will tell you it doesn't, and if you just read the HOA statutes, that will appear to be the case. But if you read the Tax Deed statutes, it is clear the HOA debt does not survive. My attorney straightened me out on this. It's state statute, so which county doesn't matter. Some attorneys are still wrong on this too.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
@Sa Nied Forgot to mention you above.
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Jeff B.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
10y
@David Dachtera @Rick H. Thank you for the correction - - senioritis - - a moment when the synapses just don't connect :sigh:
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Rick H.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
Thank you for reminding me
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