Foreclosure On Investment Properties

5 Replies

My investment group invested funds accumulating $120k among four properties in the Houston area. I was pretty suspicious regarding the finished property being pulled off of the market suddenly for a month. Looked up some information today and spoke with the original lender stating that he foreclosed on the property due to the property not selling in time. While we do have deeds of trust for each property I do not have the original notarized copy so was unable to file a lien at the courthouse. The other three properties show little to no signs of development and I am sure those properties will be foreclosed on as well. What legal recourse do we have to recover funds if we are unable to place liens on the properties?   

Originally posted by @Ulysses Grant, IV :

My investment group invested funds accumulating $120k among four properties in the Houston area. I was pretty suspicious regarding the finished property being pulled off of the market suddenly for a month. Looked up some information today and spoke with the original lender stating that he foreclosed on the property due to the property not selling in time. While we do have deeds of trust for each property I do not have the original notarized copy so was unable to file a lien at the courthouse. The other three properties show little to no signs of development and I am sure those properties will be foreclosed on as well. What legal recourse do we have to recover funds if we are unable to place liens on the properties?   

 Ulysses, 

I am sorry for you. Check with a real estate attorney licensed in your state. Each state is different. What you have are unrecorded mortgage liens on these properties. Some states allow you to have a 'claim' on the property even if your trust deed is not recorded - not sure what is the law in Texas.

Well, you likely won’t recover the majority, if any, of your money as it sounds like you were lending money as a second mtg (if your mtgs were/are recorded prior to a first mtg foreclosure).  Get your mtgs filed ASAP. If the properties sell at auctions for more than the first mtg, unlikely, you’d get any overage amounts.  It’s doubtful the individual will have any money to pay any judgments you might get.

Find out the status on his first mtgs on the other properties and if it makes sense, buy out the first mtgs so that you have more control.

As uncomfortable responding to what appears to be a fake profile, I'll say that you don't need a wet-ink copy to record a lien in the real property records - in Texas.  Mostly the documents are scanned, and then the Electronic Signatures Act kicks in.  If the DoTs weren't recorded, likely you didn't close at a title company.  There may be other liens in front of yours.  Check your docs to see if you can begin foreclosing for failure to start repairs.

Originally posted by @Jerel Ehlert :

As uncomfortable responding to what appears to be a fake profile, I'll say that you don't need a wet-ink copy to record a lien in the real property records - in Texas.  Mostly the documents are scanned, and then the Electronic Signatures Act kicks in.  If the DoTs weren't recorded, likely you didn't close at a title company.  There may be other liens in front of yours.  Check your docs to see if you can begin foreclosing for failure to start repairs.

Thanks for the response. Not sure what you are referring to regarding a fake profile but nevertheless there was a senior lien in front of ours. The property has been foreclosed on by the senior lien holder which plans to sell the property. The documents were most likely filed in Maryland vs Texas but I do have the signed and notarized documents. The funds we provided were intended to be towards the cost of the build out returned with interest so we were not involved in the closing process.