So we have a Non Performing note in Chicago and the borrower is deceased. Can anyone advise how I find out who the executor is for the estate? Would this be in public record somewhere?
@Bob E. If you own a note and mortgage with equity, start a foreclosure. Often, the family WILL NOT start a probate, if the only asset is a house in some stage of delinquency. The foreclosure will get the attention of the family members (if any), and you can then negoiate with them, or contine the foreclosure, so you get the house WITHOUT the need of a probate. If you get a quitclaim deed from all heirs, you may be in a position to avoid any overbids at the sherrif sale, due to your redemption rights. This is a very nifty technique we use here in Portland.
I just picked up one of these (NPN with deceased borrower) myself in Texas. I like Dave's advice. There's nothing like a foreclosure action to get a conversation started. My intention is to simply initiate FCL and see what happens.
I don't think Bob wants to finish the foreclosure, if avoidable.
The QC Deed play has its limits since the lineal heirs do not have standing. Absent capacity, powers and authority, grantors' QCD's serve only to release but not affirmatively transfer their interests, if any.
@Bob E. Should you go the DIL route, in any firm, be certain to use a different entity than that of the note holding entity to avoid merger of interests and preserve ability to perfect title via fireclosure, should this be necessary later.
@Dave Metsker @Mike Hartzog As an FYI we already started FC but Chicago can take a long time and I would like to speed things up by going for a DIL. The family in this case has rented out the property in question so their goal is to collect rent as long as they can.
To counter this I want to find out if an executor has been appointed.
If so then we want to push the executor to get a status of the estate. I would think that if they have disbursed funds prior to settling all obligations that they have broken some rules. If they are renting the unit and are not the legal executor then they are stealing by renting out someones property and pocketing the money that legaly should be going into the estate to pay obligations such as our mortgage.
So the first step in getting a DIL is to get documentation of who the executor, if any, is.
Ask your foreclosure attorney if you can get an assignment of rents, even if it is not in the note and mortgage (which is probable). Maybe he/she can also come up with a vague violation of the mortgage, such as the landscape clause, or "commiting waste", which is very vague, but if served on the tenants by the sherrif, it would get their attention. I still believe the family never started a probate, and never intends to.
@Dave Metsker I agree that the family probably does not intend to start probate. Wonder if they reported that rent income on their tax returns?
I already checked the mortgage and there is not an assignment of rents but I will read it one more time to see there are any other potential violations. Thanks for the idea.
I've been investing in notes since 1989 and have never made a major effort to recover lost income from rents.
If you follow the "collateral" theory of lending, as I do, I make it a point to understand the asset, the liquidation value and the barriers and obstacles to collecting and maximizing yield.
If you follow the "emotional equity" theory, as my buddy and author Gordon Moss does in his book, 'Performance Anxiety' then you put much faith in the ability to extract cash flow and yield from the borrower's familiar attachment to the home used as security.
Yesterday I attended a conference of court-appointed receivers, who are people empowered to do such things as intercede with collecting rents, cash flows and till taps. I'm guessing that the minimum cost of such an action would outweigh the piddly amount of rent that might be available.
My conclusion: Find another garden to harvest from.
So the family has probably collected 50-70k in illegal rent over the years, I am not hung up on that, I just need to understand the probate laws to see if I have any leverage here to push for a faster DIL or just have to slug it out through FC.
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