Can bank block bringing loan current for Sub2 deal?
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Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
12yThey just don't care, especially the attorney. Its all just routine stuff to them, I'd say well over half the foreclosures get reinstated and mom and dad write a lot of those checks. They are cashier's checks anyway, so they dont know where they come from. I call up and say "Hey, my name is Darrell Shepherd, I'm working with john and suzy homeowner to get their loan reinstated, who do I send the letter of authorization to?" They can't talk to you about it until the borrower signs off on you getting the info. On your first one just call them and ask what they need in order to discuss the account with you (POA, LOA, etc). The bigger atty offices will look up who's handling the case and get you do them, the smaller ones will just give you their fax or email. Sometimes it takes a day or two to get that processed after you send it in with the real big ones. Hard to do on a super tight timeline, but I've done them in under a week before, just pretty stressful because they are slow and you cant do much to rush them, although they will try if they know the sale is coming up.
The atty office will just be relaying info to you from the bank. Reinstatement amounts and such. They simply just don't care where the money comes from or what happens after they get their fees. You aren't doing anything wrong, no need to be all shady and stuff, I've had convos about my business model with the paralegals while we were sitting there waiting for paperwork and such, especially when I was doing several a month with that one firm. You aren't assuming the loan, by the way, you need to get that vocab out of your vernacular, there's a difference between buying sub2 and assuming and these aren't assumable loans we're dealing with.
I've never really have any direct contact with the bank unless I chose to. I do call and get the payoff myself, so the bank has the POA or Letter of Authorization on file for that, but everything about the foreclosure is done through the atty. Once the loan is caught up and no longer in foreclosure, then its just like any other sub2 deal.
62 Replies
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Curtis it does not work that way the Trustee that is handling the sale is not the bank. The bank does not handle the sale. The bank gives the Trustee instructions. IE if you receive X ( reinstatement figure) you may cancel the sale. Your money is not at jeopardy.. they will either take the funds and cancel the sale or they will send them back to you.. they just don't keep them and say sorry.
Your risk is that you want to have the property deeded to you before you part with the funds. Or do it in the same day is how we do it. Sign deed send in the funds. KNOWING that the sale will be cancelled. and this is all handled outside of an escrow.. If your going to be in the last minute foreclosure rescue business there is no time for title co. ITs a risk reward scenario and you must be able to either do your own title search or like I said have a good enough relationship that a title co . will give you a date down over the phone which is 95% accurate or better.. then your risking 30 to 40k on a title issue if your in the bizz and lose well that's just the cost of doing business.. But if you are in the bizz you self insure yourself with your knowledge of how the transaction takes place.. Which of course your educating yourself here on line.. Which is the type of info you take with a grain of salt right?
Your trying to do a normal buy escrow in a last minute foreclosure rescue scenario so as you state it all depends on What the Trustee's marching orders are from the bank.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Only way you will know for sure is to send the funds in... they are not obligated to take them as has been discussed. however they very well may take them as opposed to having another OREO..... Especially if they don't feel that the sale if its a full credit bid will bring a 3P buyer. YOu need to talk to a title co. that hopefully you have done closings with and see if they will accommodate you... It certainly can be done.. But is not how as I state those in the business usually work as there is just not enough time.. If you started this process last Monday then NP
You are spot on my friend. I can't disagree with those comments one bit. My only question then remains HOW do i get the deed signed over to me without a closing. I have a prelim title report already from Chicago Title. Now i don't know how to read it but it has what I expect to have on there. The abstract judgement for the $8K unemployment lien.
It reads...(names and account numbers changed)
A deed of trust to secure an indebtedness in the amount shown below,
Amount:
Dated: Trustor/Grantor Trustee: Beneficiary: Recording Date: Recording No.:$387,000.00
January 9, 2008
John Doe, a single man
California Reconveyance Company, a California Corporation Washington Mutual Bank
January 15, 2008
as instrument no. XXXXXX, Official RecordsAn agreement to modify the terms and provisions of said deed of trust as therein provided
Executed by: N.A.
Recording Date: Recording No.:John Doe, a single man and Jim Doe, a single man and JPMorgan Chase Bank,
September 19, 2012
as instrument no. XXXX, Official RecordsAn assignment of the beneficial interest under said deed of trust which names:
Assignee:
Loan No.: Recording Date: Recording No.:Vericrest Financial, Inc.
XXXXXXX
July 23, 2013
as instrument no. XXXXXX, Official RecordsA substitution of trustee under said deed of trust which names, as the substituted trustee, the following
Trustee: Recording Date: Recording No.:
Pine Point Lender Services, LLC
April 17, 2014
as instrument no. XXXXXX, Official RecordsA notice of default under the terms of said trust deed
Executed by: Recording Date: Recording No:
Pine Point Lender Services, LLC
April 17, 2014
as instrument no. XXXXX, Official Records10. An abstract of judgment for the amount shown below and any other amounts due:
Amount: Debtor: Creditor: Date entered: County: Court:
Case No.: Recording Date: Recording No.:
$4,100.91
Jim Doe
State of California, Employment Development Department March 1, 2011
Sacramento
Superior
XXXXXXXX
March 22, 2011
as instrument no. XXXXX, Official RecordsTitle No.: 111408470-MD
CLTA Preliminary Report Form - Modified (11/17/2006)
Printed: 07.13.14 @ 09:18PM CA-CT-FLAX-02180.055690-SPS-1-14-111408470
5
EXCEPTIONS
(continued)11. An abstract of judgment for the amount shown below and any other amounts due:
Amount: Debtor: Creditor: Date entered: County: Court:
Case No.: Recording Date: Recording No.:
$2,646.87
Jim Doe
State of California, Employment Development Department October 27, 2011
Sacramento
Superior
XXXXXXX
December 16, 2011
as instrument no. 2011-1710147, Official RecordsEND OF EXCEPTIONS
Title No.: XXXXX-MD
CLTA Preliminary Report Form - Modified (11/17/2006)
Printed: 07.13.14 @ 09:18PM CA-CT-FLAX-02180.055690-SPS-1-14-111408470
6
Note 1.
Note 2.
Note: The current owner does NOT qualify for the $20.00 discount pursuant to the coordinated stipulated judgments entered in actions filed by both the Attorney General and private class action plaintiffs, for the herein described Land.
In order to complete this report, the Company requires a Statement of Information to be completed by the following party(ies),
Party(ies): All PartiesThe Company reserves the right to add additional items or make further requirements after review of the requested Statement of Information.
NOTE: The Statement of Information is necessary to complete the search and examination of title under this order. Any title search includes matters that are indexed by name only, and having a completed Statement of Information assists the Company in the elimination of certain matters which appear to involve the parties but in fact affect another party with the same or similar name. Be assured that the Statement of Information is essential and will be kept strictly confidential to this file.
Note: There are NO conveyances affecting said Land recorded within 24 months of the date of this report.
Note: If a county recorder, title insurance company, escrow company, real estate broker, real estate agent or association provides a copy of a declaration, governing document or deed to any person, California law requires that the document provided shall include a statement regarding any unlawful restrictions. Said statement is to be in at least 14-point bold face type and may be stamped on the first page of any document provided or included as a cover page attached to the requested document. Should a party to this transaction request a copy of any document reported herein that fits this category, the statement is to be included in the manner described.
Note: When this title order closes and if the Company if handling the loan proceeds through a sub-escrow, all title charges and expenses normally billed will be deducted from those loan proceeds. Title charges and expenses would include Title Premiums, any Tax or Bond advances, Documentary Transfer Tax, Recording Fees, etc.
Note: None of the items shown in this report will cause the Company to decline to attach CLTA Endorsement Form 100 to an Extended Coverage Loan Policy, when issued.
Note: The Company is not aware of any matters which would cause it to decline to attach CLTA Endorsement Form 116 indicating that there is located on said Land a single family residence , known as XXX Avon Street, in the City of Burbank, County of Los Angeles, State of California , to an Extended Coverage Loan Policy.
Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage.
Note: In compliance with the new RESPA regulations, Chicago Title Company will be averaging recording fees for Single Family 1-4 Residential properties. Please contact your Title Officer to obtain the current recording fees. In addition, Chicago Title Company will pay our underwriter 12% of the title premium, as disclosed on lines 1107 and 1108 of the HUD-1.
Note 3. Note 4.
Note 5.
Note 6. Note 7.
Note 8.
Note 9.
NOTES
Title No.: XXXX
CLTA Preliminary Report Form - Modified (11/17/2006) Printed: 07.13.14 @ 09:18PM 7
=
Note 10.
Note 11.
NOTES
(continued)
Note: Any documents being executed in conjunction with this transaction must be signed in the presence of an authorized Company employee, an authorized employee of an agent, an authorized employee of the insured lender, or by using Bancserv or other approved third-party service. If the above requirement cannot be met, please call the Company at the number provided in this report.
This transaction has been identified as a "Short Sale" with pending negotiations on the below referenced Deed of Trust(s) and/or judgments or liens. To avoid any delays in closing, Chicago Title Company will require the following items for review and verification prior to the closing of said transaction and reserves the right to require additional information to clarify requirement should the need arise.
- a) A valid and current demand(s) signed by Lender and acknowledged by Borrower with any amendments thereto. Should the due date of the funds be the same date as closing, the Company will require an extension from the short sale lender to confirm funds will be accepted should they be received the following day.
- b) A copy of the negotiated Short Sale Approval Letter. The Company will also require written approval from the short sale lender should there be any changes from the pre-approved HUD and the final HUD prior to closing. This includes approvals for any additional funds brought to closing by Brokers or Buyers not listed on the original approval.
- c) Should the aforementioned Short Sale Approval Letter contain any conditional language regarding the future transfer of said property, the Company reserves the right to request its elimination and/or modification.
- d) A certified final HUD to accompany closing documentation for the short sale lender. Funds will not be disbursed until the final HUD has been submitted for review and approved by the Company's payoff department.
END OF NOTES
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Ok you have title figured out.. Its as simple as prepping a deed ( Grant Deed) having the seller sign and notarize then record it. Since you paid for a pre lim that means you have an open escrow they may accommodate you and prep the deed for you. .WE always did our own.
given the information on the PRE that you just posted.. you would be taking title no only Sub to the loan but the liens as well. Of course these type of liens are extinguished at a trustees sale. and the one handling the sale is Pine point Lender services that's who you need to be talking to first and foremost then move out from there.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
one word of caution... Is that title companies are more skiddish on deeds that are prepped out side of escrow than they used to be... Unless of course you have a long standing relationship with them ( like I had with my Title co. 100 plus transactions a year).
you could run into issues going forward with them not prepping the deed and doing a full escrow. YOu should ask them
Hi Jay,
I do have somewhat of a relationship with a contact at the title cpmpany, but no transactions. So should I call them up and ask point blank how do I get the deed outside of escrow? This is where I'm lost. I will get the deed and pay the funds same day. But I will not pay and then wait.
@Greg H. @Darrell Shepherd @Jay Hinrichs @Hattie Dizmond
I have a contract in front of me!!! THANK YOU BP! JUST NEED TO GET TO CLOSING!!
I have questions, but first an update...
Talked to bank for TWO HOURS nonstop. They were very helpful. They said (and I recorded) that as long as they get the money before the sale, they will stop the foreclosure. On top of that, I worked out a repayment plan with them to give them $25K up front instead of $40K reinstatement, and they basically are giving me a loan for $15K for 10 months. I'll take it.
This will be signed tomorrow morning. And the minute we fax it back, since it's a repayment plan, it immediately stops the foreclosure. I will wire the money immediately after we close escrow.
Call the RE Attorney to get a Sub2 addendum prepared by him that he uses for his clients. $300 for a word doc, but it was worth it later in the day when I told the agent my lawyer prepared it so it's legit. Shut him right up.
Call GC to inspect the house (plumbing, electrical, foundation, HVAC, etc.) He tells me "yeah you got lucky on this one. Good find" Enough for me to say I'm ready to do it.
And then the damn drama...
Seller calls frantic saying they found a cash buyer and they want to back out of my offer. WTF!! I immediately know the realtor is up to this and it's all about his commission. Long story short, many phone calls and texts later, they decide to go with me as I just used my negotiating skills I learned from my Trump Style Negotiation book. I'll be damned they worked.
So I have the contract and before I sign it, my questions are...
How is the agent's fee calculated? Do the liens, seller walking money, title insurance, etc count towards the purchase price, thus raising the commission? Because that's what he was selling. I'm not sure if it's true or not. I never paid attention to that stuff. A house is listed at $400K, you say yes, and that's what he gets the commission on. But what is included in that purchase price?
Secondly, this home is Subject To, and it says "Buyer pays for termite inspection, sewage inspection, natural hazard zone report, wells tested for water portability"
Should I have him uncheck all that?
- Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes12y
@Curtis H.
That is freaking awesome, man!!! Congratulations and nice job brother!
So, since the buyer traditionally pays the realtor commission, I would say the commission is calculated on the purchase price, period. It doesn't sound like the buyers are walking with much more than avoiding loosing the house entirely and having it show as a foreclosure on their credit report. If the deal is a purchase price of $400k, financed subject to the existing mortgage, then I would calculate the commission on that price. However, I wouldn't go above 3.5%. That's 1/2 a percentage above what the agent would get if you had used an agent yourself. I wouldn't pay the agent the full 6%. They certainly did nothing to help you in this process.
As far as the buyer pays portion, the termite report is something the buyer pays for, if the buyer wants it. It isn't a mandatory report. I don't know what those other reports are. I suspect they are California specific, but it would lead me to believe they are buyer optional as well. Unless they are required by the state, you don't have to pay for reports you don't need or want.
Thank you Hattie. It has been a hell of a day. Don't think I ate until dinner, and was up at 6:30 ready to call the mortgage company.
So in regards to the structure of the deal...
$460K left on loan I am assuming
$14K to seller to walk
$8200 Lien payoff
If I paid the agent based on these calculations, his commission of 3% would be $14,466. He calculated his commission at $14,878. I'm trying to figure out where he got that number from, and if he is supposed to be getting that much anyway.
- Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes12y
Hmm...interesting. I can't figure out from those numbers where his version of the commission calculation is coming from. However, I will say that I wouldn't include the lien amount in the purchase price. That's just me, and it doesn't change the commission that much.
I think you've done an amazing job navigating this. Seriously, I'm proud of you. You should know now that there isn't any deal you can't take down, if you want to!
Ahh you make me want to give you a big ole hug and move back to Texas! The mortgage lady was from Texas and she was AMAZING. I said you are from Texas aren't you? She says "was it the accent?" I said "No, you are so damn nice!" There is nice, and then there is Texas nice. I do miss that.
And you are right, I can't figure out how he's getting that number either....
- Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes12y
Well, he'll get what he gets. Everyone deserves to make a living.
I'm glad you got someone at the bank who was knowledgeable, willing to work with you, and a Texan!
Now...go get some rest. You deserve it!
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