anatomy of lis pendens - questions on process

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anatomy of lis pendens - questions on process

Daria B.
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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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.  

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  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y

    Can I get my hijacked post back..... :0)

    1Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ 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.

    You packed a lot of misinformation in a few sentences. Lis pendens are typical of judicial foreclosures.  There is no lis pendens in a typical CA foreclosure, which is non judicial.  Non judicial means no court case.   A lis pendens is notice of a court case.  The OP is is a judicial foreclosure state where this is such notice. The NODs and NTS schedule you write about does not apply.

    A short sale is not impossible in this case.  Living owners make a short sale more possible, not less.

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    Thank you K.

    If they do owe a lot (i.e. $151, or even $140) this won't be a good deal as the rent in this area will not cover all the operating expenses including P&I.

    In crafting my letter, am I asking for a title report from the remaining owner other than what they owe and if they are open to a short sale? 

    Thanks

    0Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y
    Originally posted by @Account Closed:

    You packed a lot of misinformation in a few sentences. 

    If you read 7 up from here, you would have seen that was already addressed :grin:

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    Thank you K.

    If they do owe a lot (i.e. $151, or even $140) this won't be a good deal as the rent in this area will not cover all the operating expenses including P&I.

    In crafting my letter, am I asking for a title report from the remaining owner other than what they owe and if they are open to a short sale? 

    Thanks

    Title reports come from your title company, not the owner.  The owners do not have a title report and likely do not know what would be on it.

    The point of a short sale is to buy the property for a price that makes sense, with the lender agreeing to take less than what it is owed.  What is owed isn't relevant.  What they will accept for a payoff is what matters.

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    Thank you K.

    If they do owe a lot (i.e. $151, or even $140) this won't be a good deal as the rent in this area will not cover all the operating expenses including P&I.

    In crafting my letter, am I asking for a title report from the remaining owner other than what they owe and if they are open to a short sale? 

    Thanks

    Title reports come from your title company, not the owner.  The owners do not have a title report and likely do not know what would be on it.

    The point of a short sale is to buy the property for a price that makes sense, with the lender agreeing to take less than what it is owed.  What is owed isn't relevant.  What they will accept for a payoff is what matters.

    Got it. This is not at the stage of getting a title company involved. How can I do that without being in a contract? I've purchased in the past but dealing with a title company has always been when I was under contract and going through with the sale. I have no experience with short sales, or potential short sales (which I believe this is since it's at the beginning of the foreclosure stage).

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    Thank you K.

    If they do owe a lot (i.e. $151, or even $140) this won't be a good deal as the rent in this area will not cover all the operating expenses including P&I.

    In crafting my letter, am I asking for a title report from the remaining owner other than what they owe and if they are open to a short sale? 

    Thanks

    Title reports come from your title company, not the owner.  The owners do not have a title report and likely do not know what would be on it.

    The point of a short sale is to buy the property for a price that makes sense, with the lender agreeing to take less than what it is owed.  What is owed isn't relevant.  What they will accept for a payoff is what matters.

    Got it. This is not at the stage of getting a title company involved. How can I do that without being in a contract? I've purchased in the past but dealing with a title company has always been when I was under contract and going through with the sale. I have no experience with short sales, or potential short sales (which I believe this is since it's at the beginning of the foreclosure stage).

    Title reports are reports prepared by a title company.  Some are more comprehensive than others.  You do not need to be in contract to get a title report.  You may have to pay, though, depending on your relationship with your title company.  If you do not know how to research and understand title, then you need the assistance of a title company.  You'll waste a lot of time chasing deals that aren't if you don't figure out how to get title information.  

    0Reply
  • Jeff James
    Real Estate Investor · Whiteland, IN · Member since 2014 · 54 posts · 20 votes
    10y

    @Daria B., I am not going to contradict what @Account Closed said above.  You may need to consult with a title company to get the info you need.  You may also be able to find some of it online as well.  I have found that FL public records are available online to a much greater extent than they are here in Indiana.  I have not done much research online for Alachua County if that is where your property is located so I don't know how user friendly their site is.

    If you want any assistance PM me and I can try to find some of the info that you need.

    Sorry for hijacking your post earlier.

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:
    Originally posted by @Account Closed:
    Originally posted by @Daria B.:

    @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?

    By all means contact a living owner and find out what you can. Find out if there are living owner/borrowers to work with. Also get a title report. The balance is the least of your concerns. The condition of title matters most if you want to buy it prior to auction or it becoming an REO.

    Thank you K.

    If they do owe a lot (i.e. $151, or even $140) this won't be a good deal as the rent in this area will not cover all the operating expenses including P&I.

    In crafting my letter, am I asking for a title report from the remaining owner other than what they owe and if they are open to a short sale? 

    Thanks

    Title reports come from your title company, not the owner.  The owners do not have a title report and likely do not know what would be on it.

    The point of a short sale is to buy the property for a price that makes sense, with the lender agreeing to take less than what it is owed.  What is owed isn't relevant.  What they will accept for a payoff is what matters.

    Got it. This is not at the stage of getting a title company involved. How can I do that without being in a contract? I've purchased in the past but dealing with a title company has always been when I was under contract and going through with the sale. I have no experience with short sales, or potential short sales (which I believe this is since it's at the beginning of the foreclosure stage).

    Title reports are reports prepared by a title company.  Some are more comprehensive than others.  You do not need to be in contract to get a title report.  You may have to pay, though, depending on your relationship with your title company.  If you do not know how to research and understand title, then you need the assistance of a title company.  You'll waste a lot of time chasing deals that aren't if you don't figure out how to get title information.  

     Ok.

    I've always done things the conventional way and am trying to think outside the box. A little difficult when I don't know all the things that can be done. Thanks.... 

    I'll call a few title companies and find out what they provide at what cost.

    At the very least what do you look for in the title, ie to see if there are other liens or individuals tied to the property or are there other more important things.

    Thanks... 

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    @Daria B.

    1) Learn to look up mortgages/liens online...they're online at your county clerk of court...official records search...search by owner name, shows all recorded documents...same place you found the LP

    2) Don't over think it

    3) Contact the owner, see if they are willing/able to do a short sale

    4) If not, pass.  If yes, find an experienced short sale agent, which will be required by the lender.

    5) Follow the agent's advice, or pass.

    I always do a title search since it is easy for me, and the number and type of liens will determine how the short sale needs to be structured to have a chance at being both successful and a good deal. Any experienced short sale agent will do this up front.

    If you need some help navigating the online site, PM me and I'll walk you thru it.

    1Reply
  • Adrien C.
    Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
    10y

    Follow Wayne's advise above- there's no point spending a lot of time researching a property if the owners are not willing to work w you. Up to the time of the auction, the owners on title have some control in whether or not the property is sold. You mentioned you had access to the docket of court filings. Look for the document that is the judgement. This document will show the total amount due to the bank. Many times you estimate of the remaining mortgage is way off because you don't know when they last made a payment, all the back unpaid interest, court and attorney fees, and other fees. The judgement will also show other folks who are owed which will have to be negotiated with in a short sale. The earlier in the foreclosure process you can initiate a short sale offer, the higher the likelihood of the bank accepting; foreclosures are extremely expensive for a bank. Once a NOS of sale is flied, you have little chance of a bank accepting a short sale. They've already dropped a ton of money on this and don't have much left to lose by letting it go to auction with hopes of getting a good bid battle. With the LIS being pretty recent here, I'd track down the owners ASAP and try to get something worked out. Best of luck- it's a numbers game. 

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Jeff James:

    @Daria B., I am not going to contradict what @Account Closed said above.  You may need to consult with a title company to get the info you need.  You may also be able to find some of it online as well.  I have found that FL public records are available online to a much greater extent than they are here in Indiana.  I have not done much research online for Alachua County if that is where your property is located so I don't know how user friendly their site is.

    If you want any assistance PM me and I can try to find some of the info that you need.

    Sorry for hijacking your post earlier.

    Hi Jeff,

    The public records here is really great. I use it all the time and can find a lot of information. My issue is the "steps" in doing some the things that I'm not well versed in. In this case, short sales (potential properties that may be). I wanted to know if contacting the owner in this case would do my any justice and then where to go, what to do.

    The appraisers, tax, flood, permit sites are where I live. :)

    After I look up the property on all these sites I'm typically done after amassing what I need but outside that, it's the actual title search that appears will really tell me if there are other liens or people tied to the property.

    I'm not sure how or where the title companies get their information that is not public records, but if they are the ones that have to have the stamp of approval then who can fault that process.

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Adrien C.:

    Follow Wayne's advise above- there's no point spending a lot of time researching a property if the owners are not willing to work w you. Up to the time of the auction, the owners on title have some control in whether or not the property is sold. You mentioned you had access to the docket of court filings. Look for the document that is the judgement. This document will show the total amount due to the bank. Many times you estimate of the remaining mortgage is way off because you don't know when they last made a payment, all the back unpaid interest, court and attorney fees, and other fees. The judgement will also show other folks who are owed which will have to be negotiated with in a short sale. The earlier in the foreclosure process you can initiate a short sale offer, the higher the likelihood of the bank accepting; foreclosures are extremely expensive for a bank. Once a NOS of sale is flied, you have little chance of a bank accepting a short sale. They've already dropped a ton of money on this and don't have much left to lose by letting it go to auction with hopes of getting a good bid battle. With the LIS being pretty recent here, I'd track down the owners ASAP and try to get something worked out. Best of luck- it's a numbers game. 

    Thanks this is what I was looking for. I did find the case in the court records and the last filed document is the lis pendes. There is no judgment. 

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Wayne Brooks:

    @Daria B.

    1) Learn to look up mortgages/liens online...they're online at your county clerk of court...official records search...search by owner name, shows all recorded documents...same place you found the LP

    2) Don't over think it

    3) Contact the owner, see if they are willing/able to do a short sale

    4) If not, pass.  If yes, find an experienced short sale agent, which will be required by the lender.

    5) Follow the agent's advice, or pass.

    I always do a title search since it is easy for me, and the number and type of liens will determine how the short sale needs to be structured to have a chance at being both successful and a good deal. Any experienced short sale agent will do this up front.

    If you need some help navigating the online site, PM me and I'll walk you thru it.

    Thanks, will do on the PM. I'll send a letter to the owner. He's also a resident in Florida.

    I use the public sites (appraiser, tx, permit, flood, etc.) quite frequently and have gotten all the information enough that I wanted to find out how to pursue this.

    0Reply
  • Adrien C.
    Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
    10y

    Since there is no judgement- it's early in the process. Find the owners, get them on your side and show them how you can help. Once they are on board, have them fill out an information release authorization form from the bank which gives you permission to speak w bank. It may be a situation where you do a sub-to, catch up back payments, keep loan current while you rehab, and then sell. That doesn't work well if you are keeping as a hold if which case you probably want to do a short sale. The bank probably assigned a relationship manager to the loan who is trying to work with the owners to resolve the debt before foreclosure. 

    0Reply
  • Daria B.
    OP
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    10y
    Originally posted by @Adrien C.:

    Since there is no judgement- it's early in the process. Find the owners, get them on your side and show them how you can help. Once they are on board, have them fill out an information release authorization form from the bank which gives you permission to speak w bank. It may be a situation where you do a sub-to, catch up back payments, keep loan current while you rehab, and then sell. That doesn't work well if you are keeping as a hold if which case you probably want to do a short sale. The bank probably assigned a relationship manager to the loan who is trying to work with the owners to resolve the debt before foreclosure. 

     Thanks more information the better and very helpful. If not this one then the next. Lots of learning thrown at my curve at a small amount of time to react. But this is good!

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