All Forum Posts by: Dion DePaoli

As stated above, refinance eligibility is a matter of qualifying for a loan per lenders standards. That does not include terms of a present loan only the idea that payments were made in timely manners per the note, to a degree, whatever those terms may be.

The AFR is a tax issue that the seller may face, the rate may be imputed where they have to realize a higher rate of interest than what was actually received.

My two cents, I agree with your justification Will, the only problem I have is the volume of that analysis performed by an investor (and RE agent to a degree) more often (statistically speaking) goes untested. It then becomes rooted in opinion in and of themselves. Certainly some investors, prudent ones, may keep an open on eye on previous sets of analysis and may go back and adjust, however, in terms of tested analysis appraisers are more often validated in their efforts. An appraisal is completed third party, reviewed by AMC and then reviewed by peer appraisers inside a lender's back office. Let us also not forget, appraisals can end up in courts of laws as reports delivered for a reliance on value and other legal matters such as estate distributions and such. This results in more testing of analytics and assumptions. A greater sea of peer review tends to bring a high chance adherence and conformity to the ideas that are required to access value. It doesn't make every report spot on, but increases the chances. IMO, anyway.

That said, I believe in equal opportunity to do a crappy job by all parties. Thus, at the end of the day, I as an investor only really like my opinion.

The loan interest rate as Jon has computed is under the Applicable Federal Rate issued by the IRS, which for long term loans is around 3.25% (+/-). If the payment works, look at lowering the balance to bring the rate in line, otherwise the rate may be imputed on the loan.

QuickBooks or PeachTree can be used. You can usually find an experienced professional to help you set it up or attend a class over a couple days to learn the ins and outs pretty affordable.

I am not an expert on the matter but I have used QB in large institutional capital setting and it works just fine. In addition, the companies which support these two programs are large and have lots of support and features. That may not be present in more niche applications trying to gain market share.

We sent one of our accountants (on-staff) to class for a couple hundred bucks and then paid his teacher to come to the office and help review setup and structure for a couple hundred bucks. Well worth the expense, IMO, saved time and it was all properly setup making year end faster and made things in general more beneficent around the accounting tasks.

If you are straight real property, both these programs have templates for standard uses in RE.

BTW, designating the property as your primary does not alienate the girlfriend in any manner, if there is a lease, the lease must be honored.

If there is a current lease agreement, which must be delivered to you upon request, then you have to honor that lease but you don't have to renew it. If no lease can is given to you, then she is month to month, you can give her notice to leave and must grant the proper time of notice and allow proper time for her to vacate. If she does not do so, you can start eviction.

If she is on title, she will have to sign for the sale. Without her signature, there is no sale. There is a technical caveat to that with Tenants in Common but we will leave that to a follow up post if present.

A Squatter is a person who enters and seizes possession of the property illegally. No person gave it to them, they entered and upon entering, seized.

A Tenant is someone who is given possession of the property or implied to be given possession. Clearly, not all 'tenants' are given possession by someone who can legally grant possession. The key idea there is that it was not seized by entry and use.

Charlie is not a squatter. He gained possession through Bob, whether Bob had legal authority to grant such possession is of no consequence in that sense. The bank must abide by the Protecting Tenants at Foreclosure Act of 2009 so they may not be able to initiate an eviction just yet. In addition, they may not want the cost or burden of doing it and will leave it to a new buyer. Any new Buyer will have to follow the act as well.

Essentially, Charlie either has a formal lease agreement which must be recognized or Charlie is considered a month to month, if no lease can be produced. Charlie does have to pay rent and that rent can not be 'substantially' less than market rent. Eviction can not be initiated for 90 days post foreclosure for any reason. After that, fair game.

A squatter from time to time does fall under the protection of a tenant. The reason tends to be it can't be proven the squatter is not a tenant. For instance, if the bank failed to check the occupancy of the property during foreclosure and secure it and a squatter sneaks in, then the squatter maybe treated like a tenant. If the property was secure and the squatter broke in, they are squatting and trespassing, they are not protected and can be force-ably removed with no notice.

Squatters can also turn into tenants under the same idea as above. This can follow similar occupancy standards like a hotel, around 30 days or so, they are considered occupants not squatters and are afforded rights which require eviction.

Just to play devils advocate. How does it take "years" to recover from a Bankruptcy? That seems to ignore how bankruptcy works. When debt is discharged, it is gone, there is no more.

A BK plan is made and submitted. The plan is for a period time specifically designed to discharge debts. When the final payment on the plan is made, all debts are then discharged per the plan. I can see the window of discretion during a plan, but certainly after a plan is different, the debts are discharged.

So then, wouldn't the best time be when one has no burden of debt? Seems to be when someone is the best borrower, when the ratio of income to debt as at it's lowest. There is less income competition. BK 7 can be very short plans from a couple months to two years. BK 13 plans can also vary from several months to five years.

As a type of creditor, perhaps some look too harshly on the idea of bankruptcy. If you are a creditor you can be on the bad end of the BK plan, however typically housing is not on that side since people usually have to live somewhere and BK code recognizes the on-going payment requirements of housing to a degree.

I guess, I find it interesting, that the idea seems to be rooted in how bad of a debt manager the person who file BK might be and then the idea to wait out another 5 to 7 years is actually the greater chance of that debt management practice to be right where they were prior to filing a BK. I personally would have the opposite view to that extent. While a person 5 to 7 years post discharge will have had suitable time to re-establish good or bad credit practices again where it makes it less risky to simply go with good credit, I don't subscribe to the idea fresh out of BK is bad. Nor do I subscribe to active BK is bad, espcially BK 13.

@Mike B.

I understand your point about them being two separate companies. After coming back and reviewing further I see the two links provided by OP are for MPI.

I did however, pull the brochure from Colonial and commented on that. However, I also note, that I had read MPI's landing page and kept that in mind which implies it is a US based affiliate of Colonial which made all of the Colonial commentary problematic. Colonial with no US based business would not have the same problems with statements.

Example, a UK company telling a UK investor No US Tax would fall under Portfolio Tax Exemption in US so it actually would be proper, subject to UK tax laws which I don't know. So, put my torch down for Colonial but they should address this MPI relation.

I suppose, what you can do is let your friends at Colonial know, they just went through the mud because of this MPI which has copied text from their site, uses their logo and brochure.

That said, @Annette Hibbler who the heck is MPI what is your affiliation with them and why does it now seem you are using Colonials program with what seems to be no permission. I see you have 183 posts here on BP and I don't believe you have posted something like this before. So I would suggest you clear the air about your affiliation with MPI too so you don't loose integrity here on BP. If you were sold a bag of goods by MPI, it is what it is, you are not the first nor the last person to suffer such fate. It does make the manner in which you attempted to defend my commentary a bit misplaced but that can be just a mistake. It would seem though, a logical next move is also to disassociate yourself from the MPI company so if the ship burns you don't go down with it.

@Aaron Mazzrillo

The phrasing in my post was to soften the question and to point out you are not correct. I 'know' I have been a creditor in BK in well over 100 accounts and I know I have a good idea of what BK is and how it works. My response is based on that experience and knowledge.

The example of HOA dues is not a relative example to this situation. In fact, HOA dues and other membership type fees are specifically addressed in BK code. Any fee due post filing is not discharged, fees prior to file can be discharged. An HOA fee or alike membership fee or assessment if attached to a reaffirmed asset would be due and payable by the BK applicant or discharged if pre-file in a surrender of an asset. Even in that surrender, new fees and assessments would be due and payable moving forward in time post filing. Bankruptcy protection is not an on-going never ending inclusion of creditors, that would simply not make any sense at all.

Certainly you express your difference of opinion but refrain from the condescending commentary it's not becoming of the site.

@Jennifer H. , if you are concerned about the idea of becoming considered a creditor in the BK plan, you can ask the applicant to obtain a letter from his BK attorney that your rental agreement will not be included in petition for discharge. Problem solved and fairly easy to obtain.

You will have some on both sides of the fence on whether he may or may not be an acceptable tenant. Based on my experience and knowledge of BK and how it works and what it means. I personally would rent to the guy. Frankly, that is also why I often purchase loans in active BK amongst some other concepts that are deeper than this thread requires.