When is it too late to tie up a Pre Foreclosure deal?
Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes
When is it too late to tie up a Pre Foreclosure deal?
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Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
9yDepends entirely on how fast you can close escrow on it, which relies heavily on having solid title/escrow companies and solid communication with the foreclosing lender. Once the foreclosing lender files an NOD, they can file a Notice of Trustee Sale after 90 days. Once an NOT is filed, they can foreclose once another 27 days goes by, so the clock is really ticking at that point. After an NOT is filed, you have to assume they'll be foreclosing on day 28. Therefore, hopefully you'll have started talks with the bank prior to one week left of that countdown. Seven days (which may really just be five business days) is pretty darn tight to start calling the lender to start arranging a payoff. It's doable, but it's probably going to feel pretty stressful.
48 Replies
- Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes9y
Depends entirely on how fast you can close escrow on it, which relies heavily on having solid title/escrow companies and solid communication with the foreclosing lender. Once the foreclosing lender files an NOD, they can file a Notice of Trustee Sale after 90 days. Once an NOT is filed, they can foreclose once another 27 days goes by, so the clock is really ticking at that point. After an NOT is filed, you have to assume they'll be foreclosing on day 28. Therefore, hopefully you'll have started talks with the bank prior to one week left of that countdown. Seven days (which may really just be five business days) is pretty darn tight to start calling the lender to start arranging a payoff. It's doable, but it's probably going to feel pretty stressful.
- Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes9y
It depends if the property is a short sale or a standard sale or subject-to. I like to say it's never too late until the property is foreclosed on. Sale dates can be postponed depending on what actions the borrower may take and other factors.
- Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes9y
Thanks for the info!
I can definitely see where timing and purchasing strategies may require varying degrees of communication and coordination with the bank (i.e. Having all cash to cover the purchase or short-sale vs paying the lien and taking the property subject-to).
Can you think of real scenarios or experiences where a bank is not willing to allow a lien pay-off with a subject-to before the official date of foreclosure? I imagine it's a risk analysis decision for banks (and they do have the Due on Sale Clause at their disposal) but it still seems to me that they would prefer to reinstate a performing loan over the prospect of foreclosure.
Maybe my logic is faulty, but what are your thoughts?
For context, I am learning more about NOD/Foreclosures to add into my purchasing strategies. I intend to use subject-to's and flip them on a lease option or long-term buy-and-hold.
- Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes9y
@John Payne I could be wrong, but I don't think the bank typically has the right to refuse payoff, subject to the actual verbiage in the note, of course. The trick is closing the transaction before the deadline, because if the bank forecloses, the deal disappears just like that. I agree that banks definitely like their notes to perform.
Yeah, subject-to is cool, but really make sure you do it right. You also want to be prepared for the bank to call the entire note due at a moment's notice, so just make sure you do it prepared and by the book. I've seen a pretty sharp user on BP named @Bill Gulley who has talked about it, and I know there are others to that *really* know the right way to do subject-to. Good luck!
- Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes9yNick G. That's some great info and I'll definitely take a look into the resource you provided. While I definitely look for the money making possibilities and the deal, I also want to make sure that I am truly helping the people in this situation. With that in mind, I owe it to myself and those owners to do it the right way. Thanks for that reminder!
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
In such a scenario, the lien does not need to be eliminated, it only needs to have the arrears in payments brought current.
Lenders are not typically notified of "subject to" as that would trigger Due on Sale, generally speaking.
Understand also that the actual "foreclosure" is the sale of the property at auction.
However, just because a sale occurred does not necessarily mean the deal is dead. It has happened more than once that a lender accepted a deal but the auction did not get the news in time and sold the property anyway. The sale had to be annulled in those cases.
- Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes9y
That's great info. I never knew you'd have to annul the sale for that. It makes sense, and investors better be sure to follow up immediately with any notifications.
- Paradise, CA · Member since 2015 · 1k+ posts · 871 votes9y
Originally posted by @John Payne:
Thanks for the info!
I can definitely see where timing and purchasing strategies may require varying degrees of communication and coordination with the bank (i.e. Having all cash to cover the purchase or short-sale vs paying the lien and taking the property subject-to).
Can you think of real scenarios or experiences where a bank is not willing to allow a lien pay-off with a subject-to before the official date of foreclosure? I imagine it's a risk analysis decision for banks (and they do have the Due on Sale Clause at their disposal) but it still seems to me that they would prefer to reinstate a performing loan over the prospect of foreclosure.
Maybe my logic is faulty, but what are your thoughts?
For context, I am learning more about NOD/Foreclosures to add into my purchasing strategies. I intend to use subject-to's and flip them on a lease option or long-term buy-and-hold.
Your logic is sound from a common sense perspective but, not from a banker's perspective. No, they would not rather have a reinstatement over the prospect of foreclosure without the original debtor on the note/deed. A 3rd party has no obligation to perform and adhere to the covenants of the note. The Bank has no obligation to provide any information to the 3rd party or ability to enforce covenants of the loan. As an example, new owner gets insurance on the property. Tries to do the right thing and contacts the bank for the loss payee clause, bank doesn't recognize the borrower and won't provide loss payee so new owner just gets insurance without loss payee. Bank's insurance tracking vendor notates that there is no active insurance for borrower with bank as loss payee and starts foreclosure. Another example is, new owner collects classic cars and has five or six on the property. HOA notifies original owner and bank of CCR violation for too many vehicles. New owner doesn't know, doesn't cure the violation and HOA sues or slaps a lien on the property. Bank gets notice of lien or suit, which is a breach of loan covenants and starts foreclosure. As you can see, we can do this for days. Banks can't deal (won't) with non obligor so, if the original borrower transfers ownership (Which is violation of covenants) without paying off the loan, they will initiate foreclosure. I do this daily and have for 25 years. All the borrowers i put into default can't understand why i would as long as someone is paying the note but when they get hit with the notice of intent, and then go back and read that what they did was prohibited, they start to get the picture.
Let's do one final (and legitimate real world scenario) scenario that really happens and should illustrate why this tactic is frowned upon. Original Borrower is a terrorist or a drug dealer sympathizer. He is instructed to take out a loan so the dealer can launder money or, so the terrorist has a platform with which to base his operations. The borrower looks good on paper and that's why they chose him because they know he will pass the OFAC check we have to run on EVERY borrower. He takes out the loan because he's clean knowing that the true owner can't pass the watch list background check. A couple of years go by and the original owner doesn't want to be involved so, he just quitclaims the property back to the terrorist/drug dealer. No OFAC check was performed on the new owner and the Bank knows there is a new owner and the Feds see it, run a check on the new owner in an audit and realize he's a terrorist or drug dealer. Fines the bank for not following the regulations of a Federally regulated financial institutition. This happens every day!
As a side note, our regulators (FDIC, CFPB, OCC, etc.) require us to manage our portfolios consistently and within regulation. When we get audited, and the file gets reviewed, and they see ownership changes without enforcement of the covenant breach, we end up on the news. We can't look the other way. We don't look the other way. It's not a sound business practice from a bank's persepective. It is to you, or the original owner, or the new owner and makes all the sense in the world but it's a straw purchase no matter what anyone else thinks.
- Paradise, CA · Member since 2015 · 1k+ posts · 871 votes9y
Originally posted by @David Dachtera:
In such a scenario, the lien does not need to be eliminated, it only needs to have the arrears in payments brought current.
Lenders are not typically notified of "subject to" as that would trigger Due on Sale, generally speaking.
Understand also that the actual "foreclosure" is the sale of the property at auction.
However, just because a sale occurred does not necessarily mean the deal is dead. It has happened more than once that a lender accepted a deal but the auction did not get the news in time and sold the property anyway. The sale had to be annulled in those cases.
Huh? We are notified in a multitude of ways, constantly. Insurance? Property Taxes? Assessor's changes? You don't think a multi billion dollar bank has vendor's on staff that do nothing but search for things where ownership changes? And while the lien may not need to be eliminated, just the arrears brought current, ownership can't change without triggering the due on sale.
Your annulment scenario is the proverbial needle in the haystack and did happen in the past (Albeit infrequently) but I wouldn't count on that in today's world where a bank has the Loss Mitigation department not in communication with the Foreclosure department. New Federal rules have pretty much put a stop to that probability. Lenders are required by Federal law to halt ANY foreclosure proceeding where there is a negotiation of payoff/sale/short-sale/modification. Back in the day, what you are referring to is dual tracking. That stopped in 2015 and any lender in business today isn't dual tracking. Can it happen? Sure. Does it happen? I would wager that it's an incredibly high probability that it doesn't happen today for anyone except the most inept and incompetent lender in the world that doesn't plan on being in business in six months.
- Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes9y
@Ron S. I disagree, though that may be because we're on two different pages. What @John Payne was talking about is simply the timeframe of buying a property and closing escrow before the bank forecloses upon it. It is done every day in every town in the country.
The part where it gets creative is when that is done with something like subject-to financing, whereby the seller's original loan is left in place, and the new buyer makes the payments on it with a power of attorney granted by the original beneficiary that lets them do so. In that situation, the transfer of ownership does give the lender the right to call the note due, but that is pretty rare, it generally only tends to happen in situations where the payments have stopped.
While banks may have a right to foreclose in a situation like a subject-to purchase due to stopped payments, they do not like doing so if they can avoid it, which is why the first thing they'll do, if anything, is try to call the note due. Foreclosure is a long and expensive process, calling a note due is much easier. However, again, even calling a note due is pretty rare, since as long as their note is performing the way they need it to for their investors, they're not going to want to rock the boat.
Now, a smaller private equity banker is probably going to have a different attitude than your giant direct lenders like Wells Fargo. The lender attitudes I am speaking to are that of the bigger lenders - Wells, Chase, BofA, etc. You may be entirely correct as it pertains to smaller lenders that feel the pain much more if they get slapped by one of the regulators. Much larger banks though, I'm sure, just treat it as a cost of doing business.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
Originally posted by @Ron S.:
Originally posted by @David Dachtera:
In such a scenario, the lien does not need to be eliminated, it only needs to have the arrears in payments brought current.
Lenders are not typically notified of "subject to" as that would trigger Due on Sale, generally speaking.
Understand also that the actual "foreclosure" is the sale of the property at auction.
However, just because a sale occurred does not necessarily mean the deal is dead. It has happened more than once that a lender accepted a deal but the auction did not get the news in time and sold the property anyway. The sale had to be annulled in those cases.
Huh? We are notified in a multitude of ways, constantly. Insurance? Property Taxes? Assessor's changes? You don't think a multi billion dollar bank has vendor's on staff that do nothing but search for things where ownership changes? And while the lien may not need to be eliminated, just the arrears brought current, ownership can't change without triggering the due on sale.
Your annulment scenario is the proverbial needle in the haystack and did happen in the past (Albeit infrequently) but I wouldn't count on that in today's world where a bank has the Loss Mitigation department not in communication with the Foreclosure department. New Federal rules have pretty much put a stop to that probability. Lenders are required by Federal law to halt ANY foreclosure proceeding where there is a negotiation of payoff/sale/short-sale/modification. Back in the day, what you are referring to is dual tracking. That stopped in 2015 and any lender in business today isn't dual tracking. Can it happen? Sure. Does it happen? I would wager that it's an incredibly high probability that it doesn't happen today for anyone except the most inept and incompetent lender in the world that doesn't plan on being in business in six months.
Never the less, communication does break down.
It's a matter of technology , not so much competence.
It's a matter of procedure. A process is only as good as the people who follow those procedures and the quality of their diligence.
Human nature is the great equalizer.
In a perfect world, what you say would be more than true. This is not a perfect world. People mess up. Messes get cleaned up.
- Paradise, CA · Member since 2015 · 1k+ posts · 871 votes9y
Originally posted by @Nick G.:
@Ron S. I disagree, though that may be because we're on two different pages. What @John Payne was talking about is simply the timeframe of buying a property and closing escrow before the bank forecloses upon it. It is done every day in every town in the country.
The part where it gets creative is when that is done with something like subject-to financing, whereby the seller's original loan is left in place, and the new buyer makes the payments on it with a power of attorney granted by the original beneficiary that lets them do so. In that situation, the transfer of ownership does give the lender the right to call the note due, but that is pretty rare, it generally only tends to happen in situations where the payments have stopped.
While banks may have a right to foreclose in a situation like a subject-to purchase due to stopped payments, they do not like doing so if they can avoid it, which is why the first thing they'll do, if anything, is try to call the note due. Foreclosure is a long and expensive process, calling a note due is much easier. However, again, even calling a note due is pretty rare, since as long as their note is performing the way they need it to for their investors, they're not going to want to rock the boat.
Now, a smaller private equity banker is probably going to have a different attitude than your giant direct lenders like Wells Fargo. The lender attitudes I am speaking to are that of the bigger lenders - Wells, Chase, BofA, etc. You may be entirely correct as it pertains to smaller lenders that feel the pain much more if they get slapped by one of the regulators. Much larger banks though, I'm sure, just treat it as a cost of doing business.
Yeah, I agree that it's done every day all over, my point was that lenders don't accept it and will initiate foreclosure if it's not paid off once ownership changes, quickly. The cost of doing business gets expensive when the AG steps in or the CFPB steps in and runs your business for you or tells you how to run your business. We can agree to disagree though. That's the beauty of this forum.
- Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes9y
Originally posted by @Ron S.:
Originally posted by @Nick G.:
@Ron S. I disagree, though that may be because we're on two different pages. What @John Payne was talking about is simply the timeframe of buying a property and closing escrow before the bank forecloses upon it. It is done every day in every town in the country.
The part where it gets creative is when that is done with something like subject-to financing, whereby the seller's original loan is left in place, and the new buyer makes the payments on it with a power of attorney granted by the original beneficiary that lets them do so. In that situation, the transfer of ownership does give the lender the right to call the note due, but that is pretty rare, it generally only tends to happen in situations where the payments have stopped.
While banks may have a right to foreclose in a situation like a subject-to purchase due to stopped payments, they do not like doing so if they can avoid it, which is why the first thing they'll do, if anything, is try to call the note due. Foreclosure is a long and expensive process, calling a note due is much easier. However, again, even calling a note due is pretty rare, since as long as their note is performing the way they need it to for their investors, they're not going to want to rock the boat.
Now, a smaller private equity banker is probably going to have a different attitude than your giant direct lenders like Wells Fargo. The lender attitudes I am speaking to are that of the bigger lenders - Wells, Chase, BofA, etc. You may be entirely correct as it pertains to smaller lenders that feel the pain much more if they get slapped by one of the regulators. Much larger banks though, I'm sure, just treat it as a cost of doing business.
Yeah, I agree that it's done every day all over, my point was that lenders don't accept it and will initiate foreclosure if it's not paid off once ownership changes, quickly. The cost of doing business gets expensive when the AG steps in or the CFPB steps in and runs your business for you or tells you how to run your business. We can agree to disagree though. That's the beauty of this forum.
I agree, however, I think it's important to point out misleading information to others who may be trying to understand things like the OP was - when you say thing like "lenders don't accept it and will initiate foreclosure if it's not paid off once ownership changes, quickly," that's simply just not true, all you have to do is ask someone who invests heavily with subject-to purchases. I have listened to investors for a while now who have been successful with subject-to financing, and very few of them report frequent issues with big banks calling a note due - when it did rarely happen, it usually was due to nonpayment of the loan from somebody messing up their end of the bargain, and even in those cases, they were usually able to negotiate with the bank in order to save the deal.
Big banks will almost never initiate a foreclosure if they have the option to call the note due, simply due to the length and cost of the foreclosure process compared with the faster, easier, cheaper alternative of calling the note. So while the banks have the right to do everything you're saying - you're 100% right about those rights - the reality is that those rights are not exercised very often. Perhaps it differs between different regions, markets, types of banks, etc.
Bigger Pockets Podcast episode 70 (I think) from three or so years ago was my first glimpse at subject-to purchasing, the guy interviewed had done over 100 deals that way, it might be interesting to you.
- Specialist · Northern, CA · Member since 2017 · 182 posts · 34 votes9y
Q: " Bigger Pockets Podcast episode 70 from three or so years ago was my first glimpse at subject-to purchasing, the guy interviewed had done over 100 deals that way, it might be interesting to you." UnQ.
SEE: https://www.biggerpockets.com/renewsblog/2014/05/1...
Indeed... and guys like Ron LeGrand, to Mitch Stephen and Phill Grove, etc. have done 2000+ /- deals, including mainly 'subject- to' agreements, they're just using a MLO post Dodd- Frank, and typically either sell most of the note, or become the note holder like say Mitch (smarter) if they don't do a cooperative ACTS or sandwich lease option deal, etc.? (i.e. LeGrand.)
And if you get down to 'brass tacks...' next to NOTHING the banks and their enablers have done, or are still doing today is actually LEGAL, but I'll avoid going there... or they might send a hit man? ;-)))
Many useful points here... Thanks to all, for their contributions.
- Specialist · Northern, CA · Member since 2017 · 182 posts · 34 votes9y
@Nick G. No problem, neighbor! (Plenty of savvy REI people in SoCal... I haven't found any to date up here, however... so apparently I need to get out and network, more...) Thanks for bringing up the BP 70 podcast... I don't believe I've heard that one yet, but the interviewee's name, does sound familiar?! :-)))
- Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes9y
@Scott T. @Nick G. @Ron S. @David Dachtera
I step away for a few days and it blows up!
Great insights and definitely different aspects to look at the issue from.
Ron, my only issue from your stance is the insinuation that it's unethical, illegal, or immoral practice. We could definitely discuss the ethics all day long, but to add the drug dealing and terrorism topic is a red herring and a statement that gives the impression that this practice is clearly illegal, when it's not so clear cut.
One argument I think we should go deeper into is the straw purchase and mortgage fraud because many of the examples I have seen would not be considered mortgage fraud unless the person is, in fact and proven, to be doing so to hide the transaction.
You're very nearly equating actual crimes with something that would constitute a civil/contractual dispute.
Plus, maybe you have a better example of the "due on sale" clause, but it's language is clearly meant to give the lender the right, but not the obligation (nor legal government compulsion), to call the note due.
The language would say that change in ownership in this way is absolutely prohibited. If the mortgage contract has that language, there's no debate. Intentionally hiding this fact from the lender is also mortgage fraud, but I know of plenty of investors that engage the bank with their information in order to make it work.
As far as whether or not the banks consistently call notes due....that's on the bank to do. I can see that if a bank was calling loans due inconsistently, that they would have issues.
And maybe this is just the pessimistic side of me, but I don't necessarily think a bank cares so much about the legalities or ethics insofar as it impacts the bottom line. I probably shouldn't put all banks in that category, but I don't think it's too far of a stretch for most of them. I am actually concerned the banks might employ the number of people you mentioned to start searching for ANY breaches of contract to call notes due if the interest rates ever start to increase to 6%.
- Paradise, CA · Member since 2015 · 1k+ posts · 871 votes9y
@John. This is where feelings get frayed...so, to start off, that's not my intention. That said, the FDIC and OFAC don't care what the intention is. They care about the possibility of nefarious intention. Opportunity, not intent. Red Herring? I took debate in college as well and its hardly a red herring. The FDIC and OFAC care about whether we have systems and procedures in place to mitigate the opportunity. I have real world personal experiences with both the drug and terrorist aspects in the banking world. It's vogue now to ply illegitimate trades into legitimate worlds and we don't have to look far to see examples on a global scale.
Your contractual dispute could lead to a criminal act when that fraud is perpetrated against a federally regulated institution. I've had borrowers "innocently" sell/transfer/negotiate their property and might have "innocently" omitted (Not lied!) relevant pertinent information on the purchase contract. Again, no one "Lied" but, that omission was placed on a form (Non Arms length affidavit) that was part of a package submitted to a Federal Agency (Freddie Mac) and, some entity ending in "Mac" made a financial decision to accept an amount less than the full principle balance. That borrower and the agent and the straw purchaser were all three convicted of federal offenses and two of them are in prison right now for their "contractual issue".
My pooling and service agreements with investors may compel me to call the note due. It's the investor PSA that dictates whether or not a note is accelerated upon sale if the language is in the security agreement. Many of the GSE's that end in "Mac" require and compel the lender to default and trigger the due on sale clause, or face compensatory fees or other sanctions. Since about 70% of all mortgage loans in the country are GSE loans, I'd say there is a good chance of it happening.
I think your last paragraph sums up the issue. Your logic doesn't not align with the Bank's logic and as eloquent as your position has been stated, I can tell you that it's not the bottom line above all else that matters for the vast majority of banks out there. Me thinks you've been watching too many recaps of "The Big Short" and "Wall Street" to think that banks only care about the bottom line. I'm being a bit sarcastic saying that but I'd wager that I'm less wrong that you are in that . I read the stories daily about Bank's being sanctioned and fined and sued and placed on MOU's. Just because a bank is reporting profits doesn't mean they are doing it with disregard to the consumer. And just because the bank makes money on NSF fees doesn't mean they are fleecing the customer (I acknowledge it doesn't mean they aren't either).
We have two opposing viewpoints with this subject. You aren't a banker (That I'm aware of) and your conclusion is drawn from data sources available to you. I'm a banker and my conclusion is from the gauntlet of audits and regression analysis that I have to perform on a daily basis, to document and ensure compliance to local, state and federal banking laws that change daily and are conflicting and are painful when compliance is not maintained or achieved. Maybe I'm biased. Maybe you are. That's the beauty of forums like this. We can express our biases.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
this may not be the case today but since no one mentioned it.
in CA I believe the lender has an option at either 5 days or 3 days prior to the sale to not accept delinquent payments and can demand full payment.. again at their option.
Whereas, here in the NW OR WA they have to accept it right up to sale date if its in their office in cash or cashiers check prior to the crier crying the sale..
law could have changed but that is the way it used to be.
I have done a bunch of sub too in my day as well.. but I did get a few called.... it happens for sure.... Have not done thousands but probably over 100 of them..
- Specialist · Northern, CA · Member since 2017 · 182 posts · 34 votes9y
So how' bout getting back to the topic? It seems to me that since NODs are 'publicly noted,' and most of these so- called 'government' agencies (i.e. sub corps) have to 'disclose' their intent, as they do with everything (to give it a semblance, of 'legitimacy') all one need do is go online (in many instances) today to gain access to who' all is 90+ days overdue on their debt servicing, in a given county, etc. I for one plan to soon target this niche to HELP PEOPLE, while making a buck... and (just as importantly) costing the PTB and their public and private companies, when fewer people go 'bk,' loose their equity and/ or credit, in addition to the the roof over their heads. Anyone here care to 'share ideas' and perhaps work with a ''unconventionalist,' whilst tapping- into this VAST and by enlarge unchartered, sea of WIN x3+ parties??? (Aka: The sellers, buyers & REIers!!!)
- Real Estate Broker · Colorado Springs, CO · Member since 2013 · 28 posts · 10 votes9y
@Jay Hinrichs That's great for California since I live here. What were some of your exit strategies for when the bank called the loan due? Did you have cash reserves, or were you able to get financing?
@Ron S. No feelings frayed here. I tend to take hard stances in discussions because I feel we can get a little closer to the heart of the matter. And after new data and new information, I can do more research and decide the better approach and change my opinion. And yes, I do actually try to put my college degrees to use for critical thinking rather than going to sleep with Leonardo Dicaprio and Christian Bael every night. I try to find original sources and court cases to explain the subtleties. I definitely do not have the experience in the banking industry that you have, and I appreciate your relevant insights.
I do want to understand the example you gave though. The borrower, the agent, and the straw purchaser misrepresented (by omission) info on the PSA which constituted the fraud, not necessarily because an investor took the property subject-to. Is there a difference from your perspective? I understand that the bank has the obligation to comply with federal policy and can get in trouble if they don't. But is every person currently doing subject-to deals (many on BP) committing fraud simply by engaging in taking title subject to the existing mortgage? In your opinion, is it wholly illegal for a subject-to arrangement?
@Scott T. I think you're on to a niche that can definitely use the help, but with any creative financing strategies there are pitfalls because some of the strategies sometimes work in a grey area. There are plenty of predatory lenders and investors and scammers that really do make it a tough space to work in. But we definitely have some examples here at BP of investors doing it the right way and with integrity. - 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@John Payne @Scott T. there are strict laws dealing with those in foreclosure in CA OR WA.. before spending a bunch of money and getting all fired up that your going to be helping people .. you may want to read up on those.. its not like the old days laws changed in 07 and 08 because of all the fraudsters out there stealing peoples equity.. No implication just saying that is what created these very very tough foreclosure rescue laws and the reason we don't do it any more is at least in most instance its not worth the time or trouble.. cant make enough money on them to justify doing this unless your running a non profit.. which folks do do. and maybe that's what you guys are looking to do.
- Specialist · Northern, CA · Member since 2017 · 182 posts · 34 votes9y
And I concur, sir. :-) BTW, I wasn't trying to steer the dialog off- topic, nor sound overly cynical... we all know different information, and work in a variety of different spheres, in varied capacities. I was commenting yesterday on another interrelated post, about 'cold calling' at people's front doors who are likely to loose their homes, and there were numerous great points made there, as well, entitled "Lead Generation By Door Knocking ."
See: biggerpockets.com/forums/311-buying-selling-real-estate/topics/230232-lead-generation-by-door-knocking?page=1#p2863498
- Specialist · Northern, CA · Member since 2017 · 182 posts · 34 votes9y
Hi Jay. :-) Thanks again for your input, sir. Hope things are going well for you this year in Portland metro. BTW, my CubeSmart storage manager next to the PD in Rohnert Park mentioned that there was a 'for sale' sign on a parcel next door to them, by the casino... and I'm sorry to say I forgot to make mention of it, a month or so ago. (I'm sure the price is ridiculous, but it may be a foreclosure, or tax lien?)
As for non profits, that's not my cup of java... I plan on doing a combination of Legrand's ACTS (i.e. cooperative reassignments) and sandwich LO deals, along with some sub- tos with lease purchasing, initially. And it just bugs me when someone I know OD'd herself in Carmel (variable rate mortgage, and other issues) and several other acquaintances have lost their homes, equity, credit and self respect, etc. over foreclosures, since '08. And (like doing 'terms deals' in general...) that is a nearly wide open niche for those who can hire, 1099, or JV with people like the guy Joe Crump's person interviewed on YouTube I recently linked in the article I just linked above, "Lead Generation by Door Knocking," here on BP.
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