Best Markets for Mortgage Foreclosure Surplus Strategy
Blairsville, GA · Member since 2013 · 3 posts · 1 vote
Best Markets for Mortgage Foreclosure Surplus Strategy
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Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes
7yJoe Kaiser, the Washington State investor mentioned by @Jay Hinrichs still maintains a website describing the actions he took to gain an interest in properties involved in tax foreclosure in WA and why. One of Joe Kaiser's belief's is that the various Counties resented the loss of revenue (unclaimed overages) that resulted from his business. It is an story of interest which can be found at http://www.pushedtoshove.com/
@Ana G., the owner's of tax delinquent property need all the help you can give them. Though the State's and County's talk up "protecting the public", the reality is they regularly and continually profit considerably from the losses of tax delinquent owners. The foreclosure markets, both mortgage and tax foreclosure, are ripe with opportunity.
28 Replies
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes13y
And what is a 'mortgage foreclosure surplus strategy"? Never heard of it.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes13y
Chris Martin - that is when a property has sold for a bid higher than the judgment, so there is an overage due to the foreclosed borrower; the borrowers in such cases are usually clueless, so there are those who will assist these borrowers in claiming the overage.
- Blairsville, GA · Member since 2013 · 3 posts · 1 vote13y
Chris,
The goal of this strategy is to reunite government-held unclaimed funds that have accumulated after a foreclosure auction with the rightful owner of those funds for a fee.
Michael
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes13y
Thanks Steve. I understand the surplus, but I'm having trouble figuring out how the "strategy" part fits in. As buyers at the courthouse (or sheriff sale), is this something we look for or care about? Is the idea to comb the 'final reports' looking for surplus, then try to contact the beneficiary of these funds?
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes13y
Chris, he doesn't want you to do it, he wants to do it. I know this is a new "biz" usually associated with tax deed auctions. Many owners lose property to taxes because they can't/haven't been notified, so they don't know there's a sale, let alone a surplus. I would think in a mortgage foreclosure, the owner Knows they have/had some equity, and there might be some money left over, let alone the small % that actually do have equity/surplus.
- Blairsville, GA · Member since 2013 · 3 posts · 1 vote13y
Chris,
My potential strategy is to look through final reports, as you eluded. I'm certainly not opposed to sharing knowledge, but I am still trying to wrap my head around it myself. I'd just like to know if there are certain judicial foreclosure states that are better than others, that's all. Thanks guys.
- Investor · Miami, FL · Member since 2014 · 25 posts · 10 votes12y
Go after counties that have frequent buying activity. Look for markets that are are starting to appreciate. I'f you're interested, I'd be willing to partner with you to go after overages in Miami Dade and Broward Counties in South FL. Let me know. People are overpaying at auctions over here left and right. Its starting to feel like 2005 all over again.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes12y
I'm not sure, but I think mtg surpluses here are just like tax deed suplus overages here....to collect the overage you must have an assignment from the owner AND a disclosure signed by the owner stating that they can collect the overage themselves, and where and how. I guess the govt decided owners were being clipped by the people working this angle, for 50% of the proceeds. It's actually an old game but has been recycled and pitched as an innovative new strategy by the gurus for the past couple of years. The popularity led to the new requirements.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Wayne Brooks Wayne there was a "Guru" named Joe Kaiser who sold an overages course.. ( mainly tax sale overages) Not sure how or if it would work in a tax cert state... The State of Washington AD went to war with this guy.. As they felt like you stated that people were getting taken advantage of by those claiming the rights and charging a 50% fee for something that was as easy as filling out an affidavit and presenting it to the country and getting your refund.
There is a Big Private detective type firm in the central Valley of CA I think they are called Global something ( maybe someone on here knows the name). But they work it hard.. One of their reps contacted my 80 YO mother and said Hey we found money for you and if you sign these docs we will get it for you.. Of course they won't tell you when and were.. My mom called me.. I called the tax collecter in the one county we did a lot of work in and lo and behold one of our old stragler lots had sold for 10k or so and My mom got her 8k overage.
there is also all sorts of money sitting in these state accounts for Escrow balance's that never get forwarded to the Trustor after loans payoff and people move on.. I personally had this happen to me in Oregon and it was a pretty tidy sum bout 9700 .. If I remember.. And the state dept that handled it was something you would never think of. There are PI's that work that as well they see who has surplus money chase them down and tell then they can recover for a fee....
One thing about the Trustee sales though is so many of the sour mortgages have seconds and any bid over the first is going to go to the second so even though there looks like some good overages there may not be any once you search chain of title
- Hayward, CA · Member since 2013 · 7 posts · 0 votes12y
I recently came across this new venture of helping people that lost their homes to foreclosure attain the funds that would be due to them in the event of surplus of an auction sale. Although I have not began this venture, I am looking into the process of reuniting the rightful owners to their funds as Michael is doing. I would not charge an outstanding fee to the owner of the funds because it is their money, but I would have a fee just because of the work that would be involved in attaining the fees. The 'rightful owner' may be unaware of these funds, so it is a service to notify the foreclosed owners to let them know they may have funds.
One piece that I am missing is having knowledge of the necessary documents that are needed to be involved with the process from start to finish. If someone can please tell me what forms are needed after getting in contact with the owner in order to process the claims?
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes12y
Originally posted by @Wayne Brooks:
Chris, he doesn't want you to do it, he wants to do it. I know this is a new "biz" usually associated with tax deed auctions. Many owners lose property to taxes because they can't/haven't been notified, so they don't know there's a sale, let alone a surplus. I would think in a mortgage foreclosure, the owner Knows they have/had some equity, and there might be some money left over, let alone the small % that actually do have equity/surplus.Actually tax sale overages in CA is an old biz. When I first learned about it 15 years ago, I talked to people who had been doing it for 20 years. Things have change in CA as now you have to get interest in the property before the sale in order to easily claim excess proceeds. If you try to buy or get an assignment from the owner after sale, the counties require full disclosure affidavits from everyone. Kind of put a damper on it.
That being said, there's nothing like using the county tax sale auction environment to sell something that wouldn't otherwise easily sell. Get a deed front the tax defaulted owner before sale for a consideration amount and then let the auction do the work. You gotta know values, but if you get the right property it will sell for more than it's worth to most investors and WAY more than the taxes owed.
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes12y
Originally posted by @Glen Stone:
I recently came across this new venture of helping people that lost their homes to foreclosure attain the funds that would be due to them in the event of surplus of an auction sale. Although I have not began this venture, I am looking into the process of reuniting the rightful owners to their funds as Michael is doing. I would not charge an outstanding fee to the owner of the funds because it is their money, but I would have a fee just because of the work that would be involved in attaining the fees. The 'rightful owner' may be unaware of these funds, so it is a service to notify the foreclosed owners to let them know they may have funds.
One piece that I am missing is having knowledge of the necessary documents that are needed to be involved with the process from start to finish. If someone can please tell me what forms are needed after getting in contact with the owner in order to process the claims?
Are you talking tax sales or trustee's sales? I don't see how this would work for trustee's sale in CA. It's the foreclosing trustee's job to distribute overages after the sale. If they are unable to locate the rightful owner of the funds (be it former owner or junior lender) it will escheat to the state.
Are you planning to buy the rights to overages and claim them from the trustee? I find it hard to believe that foreclosing trustee's aren't regulated on this issue.
- Hayward, CA · Member since 2013 · 7 posts · 0 votes12y
@K. Marie Poe: I am talking trustee's sales. From my understanding, the trustees are required to notify all parties of interest, but the owner before the foreclosure may not receive notice because they are out of a home with an address. I was unaware that someone would be able to buy the rights to overages and claim them from the trustee. I am still learning of this overages and how to go about bringing the funds to the owners that were foreclosed on. I am not looking to buy the rights to the overages, but act on their behalf of to get the funds to them. If buying the rights to the overages and claim them from the trustee is part of the process, then that may be something that I will look into further.
- Investor · Miami, FL · Member since 2014 · 25 posts · 10 votes12y
Have you had any luck obtaining the documentation or figuring out a way to locate these people?
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes12y
Part of the reason why I had never heard of the term "mortgage foreclosure surplus strategy" is because, from what I can tell, in NC this concept is really not viable. Surplus funds from trustee sales are handled by the clerk of court and by statute aren't paid to anyone but the beneficiary. Ultimately any surplus funds will find their way to NC 'unclaimed property' and administered by the state.
North Carolina statute requires professional finders to be registered with NC treasury. Registration is $100 per NCGS 116B-78(f). Finder fees are limited to $1,000 or 20% of the value of the property recovered, whichever is less. Competition is the NC State Treasurer... and they do not charge for an owner to claim funds due to them.http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_116B.html
http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_45/GS_45-21.31.html - Hayward, CA · Member since 2013 · 7 posts · 0 votes12y
@Samuel Pichardo: No I haven't.
- Wholesaler · Miami, FL · Member since 2015 · 202 posts · 149 votes7y
Scroll to the bottom and there’s the two sample documents needed to be signed to legally claim the surplus funds. Plus a story about how he does it.
https://efactssc-public.flcourts.org/CaseDocuments/2017/1510/2017-1510_Brief_126517_BR28E.pdf
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ana G.:
Scroll to the bottom and there’s the two sample documents needed to be signed to legally claim the surplus funds. Plus a story about how he does it.
https://efactssc-public.flcourts.org/CaseDocuments/2017/1510/2017-1510_Brief_126517_BR28E.pdf
old and tired strategy that is now coming back into the guru quiver and being marketed as new .
many states and counties really frown on this.. its very tough.. very few make it work.
- Member since 2019 · 6 posts · 2 votes7y
I have been interested in Indianapolis. Lots going for it. Im interested in what you find out. Indy has favorable landlord policies compared to a lot of other places.
- Wholesaler · Miami, FL · Member since 2015 · 202 posts · 149 votes7y
I actually didn’t hear it from a guru. I was exploring the auctions site, found the surplus tab, and researched more about it.
Yes I’m sure many states frown because they know it’s totally legal yet they feel like it’s wrong.
My experience working with tax delinquent sellers? Half didn’t even know the property was up for auction and the other 25% didn’t even know they owned the property (heirs, estranged siblings, etc).
I can trade them cold hard cash and they trade something they could care less about.
Seems easy. Im gonna go for it.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ana G.:
I actually didn’t hear it from a guru. I was exploring the auctions site, found the surplus tab, and researched more about it.
Yes I’m sure many states frown because they know it’s totally legal yet they feel like it’s wrong.
My experience working with tax delinquent sellers? Half didn’t even know the property was up for auction and the other 25% didn’t even know they owned the property (heirs, estranged siblings, etc).
I can trade them cold hard cash and they trade something they could care less about.
Seems easy. Im gonna go for it.
good luck with it.. much easier said than done though based on our experience of setting up a little division in our company to do this about 10 or so years ago.. I learned of it when someone tried to get an overage on a property my mom had let go to tax's they contacted her.. she contacts me I call the county I make the claim and thank you very much to the other people so you will for sure have a lot of that happening.. and these are TAX overages not mortgage foreclosures overages..
- Wholesaler · Miami, FL · Member since 2015 · 202 posts · 149 votes7y
Yikes yes that happens every now and again here too.
I swear I used to feel like my CRM was being hacked lol.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes7y
Originally posted by @Ana G.:
Scroll to the bottom and there’s the two sample documents needed to be signed to legally claim the surplus funds. Plus a story about how he does it.
https://efactssc-public.flcourts.org/CaseDocuments/2017/1510/2017-1510_Brief_126517_BR28E.pdf
First of all, the topic at hand is "Best Markets for Mortgage Foreclosure Surplus Strategy." The link provided is off-topic. However, this is an intriguing story where an alleged real estate investor, at face value, achieved financial gain via a tax sale surplus.
The "story about how he does it" you describe if from court proceedings where "he" (meaning the alleged real estate investor) as defendant is defending himself in the context of a FL civil court case. I see from your link this text is from the defendant's attorney in response to the case, where the plaintiff alleges the defendant engaged in the unlicensed practice of law.
In the case it is clear to me, as a non-attorney layman, that if you read all the documents, including the proposed advisory opinion (8/15/17) that the defendant was "...holding himself out as an attorney..." which is against Florida law.
So, promoting this case as a story about "how he does it," as in 'just follow his example' which is implicit in per your post, is something I would not condone. In fact, given the outcome of the case (10/4/18) where "...the Court approves the proposed advisory opinion..." I would contend, in layman's terms, that the plaintiff (the alleged real estate investor 'conning' the plaintiff (owner of the claim to excess tax from a sale)) would not have succeeded in financial gains except for deception and practices considered against public policy.
Attorneys out there, which I am not, please feel free to contribute.
If a licensed attorney were to partake in such activity as Ana promotes, I would expect a state bar ethics inquiry at the least and disbarment more likely.
I am not an attorney. These opinions are based on my readings of the content of the links provided and not to be construed as anything with legal status an any state. This post is for entertainment and not to be construed as legal opinion, counsel, or advice. Carry on. - Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes7y
Joe Kaiser, the Washington State investor mentioned by @Jay Hinrichs still maintains a website describing the actions he took to gain an interest in properties involved in tax foreclosure in WA and why. One of Joe Kaiser's belief's is that the various Counties resented the loss of revenue (unclaimed overages) that resulted from his business. It is an story of interest which can be found at http://www.pushedtoshove.com/
@Ana G., the owner's of tax delinquent property need all the help you can give them. Though the State's and County's talk up "protecting the public", the reality is they regularly and continually profit considerably from the losses of tax delinquent owners. The foreclosure markets, both mortgage and tax foreclosure, are ripe with opportunity.
- Wholesaler · Miami, FL · Member since 2015 · 202 posts · 149 votes7y
First of all, the link was provided as a response to the specific people I tagged. The “what does the documentation look like” questions which I was also having trouble finding. The link I found showed two example documents that were used in a surplus deal. Off topic?? Mkay.
Second of all, my addition of “plus a story story about how he does it” is what would be considered a “side note”. In other words a “btw”. Pointing out the PRESENCE of something is completely different than PROMOTING something. They are two entirely unrelated things.
And finally, it is clear to me that you just wasted 2 hours of your own life reading an entire court case just to prove your overinflated and super unnecessary opinion of my comment. From my point of view that article/case contains an overall 99.5% of irrelevant information to my actual focus right here and right now: “What docs do different people use? How are the docs similar? How are the docs different? What markets did they work in? Et. Cetera.
I hope you know that you do not always have to read an entire book in order to get the information you need from it. And more to that point, you also don’t have to do everything another person does. Pablo Escobar: pretty bad guy, but if one were to adopt maybe his philanthropy skills or maybe model his method of putting the right people in the right seats of a business, it would create a positive impact in that persons own business. I think you get my point here.
Rant almost over...
Cos p.s. I love how you added the comment about how you absolutely know from deep down inside your soul that I chose this article specifically from the defendant attorneys side and how you insinuated that I planned it that way so that the guy I’m “promoting” is portrayed in a better light cos I want the guy I’m “promoting” to sound so good. No bro.
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