All Forum Posts by: Hal Thompson

I have experience with redemption law in other states, but not Alabama. https://www.alllaw.com/articles/nolo/foreclosure/laws-in-alabama.html

First, let's be clear about our terms. Most states recognize an "equity of redemption". Meaning that when you have defaulted on your note, you are given a statutory period to make up your payments and bring the loan current. This always happens before any kind of foreclosure sale.

Then, there is the statutory right of redemption. This is a post-foreclosure right to pay back the purchaser, plus usually some interest, and to retake title to the property after a foreclosure sale. This is generally the redemption right that most people are referring to when they discuss redemption rights vis-a-vis foreclosure.

It looks like Alabama updated their redemption laws recently:

http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2018RS/PrintFiles/HB90-int.pdf

As in most redemption scenarios, the most junior lienors are able to redeem from the most senior, but must pay the debts of the most senior in order to redeem.

In Alabama, it appears that a transfer of the right of redemption also effectuates the transfer of the interests of the party (the naked right of redemption cannot be separated from the underlying interest): 

(5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale. A transfer of any kind made by the debtor or mortgagor will accomplish a transfer of the interests of that party.

This is very complicated stuff. If you don't have experience with it, it will be best for you to get a lawyer to help you navigate the waters. There are lots of gotchas with redemption law (for example, I've seen people hold property during a redemption period and improve it to the tune of $250k, not knowing that they will not recover the money for those improvements if the property is redeemed). It's a good idea to get a property lawyer for these kinds of transactions.

@Brad Hasseler This story is kind of confusing. You have the cooperation of the homeowner here, so there shouldn't be too many surprises.

Question 1: What does it mean that the second mortgage is "closed"? Did the homeowner pay it off? If not, then it was probably sold to another company. The fact that it is "closed" with Ditech doesn't mean it can be taken off title. You have to pay it off, otherwise someone will come looking for their money eventually. If Millenia Mortgage went out of business, then there is probably another company that acquired their servicing business and the servicing rights for this loan.

Question 2: What was the original balance of the second? When was it taken out? What is the interest rate? You can ask the homeowner for this information, or go pull the DOT or mortgage from the recorder's office. These numbers are usually in there. You can generally back into these numbers if you know the original principle balance, terms of the loan, when they homeowners stopped paying (if that's what happened, etc). It gets tricky with late fees, penalty interest, etc, but you can at least come up with a range.

Question 3: Has the owner of the property received any correspondence about the closed mortgage servicer or who will be servicing the loan from now on? https://www.consumer.ftc.gov/articles/0191-if-your-mortgage-lender-or-servicer-closing-or-bankruptcy.

One strategy here would be to get in touch with Robert Leonardo (https://www.linkedin.com/in/milleniamortgage/?trk=pub-pbmap), the guy who wrote this: http://www.milleniamortgage.net/coinfo.html

He'd probably know who bought the servicing rights to the Millenia portfolio. The biggest thing I've learned in this game is to be scrappy and work things from different angles. Eventually you'll find a solution.

@Greg Lovern Borrowers frequently declare bankruptcy to prevent the foreclosure from proceeding. This puts an automatic statutory halt on the foreclosure, and it can take a long time for the bankruptcy stay to be lifted, depending on how hard the borrower fights.

As stated above, figure out who the trustee is for the foreclosure. The trustee is effectively the auctioneer. Most foreclosures are Deed of Trust foreclosures.

There is also a small possibility it is a sheriff's sale (rare, but possible), in which case it is a judicial foreclosure and there are very different rules for those in WA State. You don't want to play that game without knowing what you're doing.

Hmmmm.... buy at auction for 2.1M. Try to sell for 3.6M. No takers at 3M. The interest costs on that have to be getting expensive... the juice on those hard money loans is 12 - 20%. That's $300k/year.

And as rates rise, the hard money guys start to pull back. It's going to be an interesting spring and summer. We have a lot of people on here who've never really seen the bad side of cheap money monster.

Just to clarify my previous post. @Sam KWak said that he had disclosed the location of one of his investment properties on his Youtube Channel. I watched this Youtube video, looked up the property via the Cook County Assessor/Recorder (it's in Chicago), and found the property he purchased. He did indeed pay $20k for it (per the video). However, as far as I can tell, there is no evidence that this property was ever sold (@SamKWak claims he flipped it, and that's why he was ok disclosing its address, despite the fact he posted the video within a week of purchasing the property....pretty quick flip given that the brothers are sledgehammering walls in the video)

@Sam Kwak I see where you buy the property in May 2017. Not seeing the part where you sell it for a profit...

This is the property pin so we're on the same page:

25164060190000

I tried to read the PA statute for this, but it's a disorganized mess. My suggestion is go down to the courthouse steps and ask some of the regulars whether you can take possession the day of the sale. Statutes aren't much help from what I can find.

@Matt J. Time to talk to a landlord tenant attorney. I would do so before making any moves one way or the other.

@Larry Bowers No. Putting the title company on notice does nothing. You want to tell the title company about the mistake, so that their E&O insurance will pay to re-record in the proper county (and in the event that someone has beat you to recording a lien that is now prior to yours, they might be on the hook for that problem as well).

Assuming no additional liens have been recorded against the property, I would just re-record the DOT in the proper county. Again, consult a lawyer and this is not legal advice, but GENERALLY SPEAKING, the document itself is still good. Recording it is just notice to the world that it exists. So just rerecord it in the correct county...there is nothing magical about having recorded it in the other county that makes it so you can't re-record it somewhere else. (This assumes, of course, that there is nothing wrong with the property description or signatures on the DOT itself).

@Sam Kwak Unfortunately Mr. Kwak, it sounds like you tried to intimidate Mr. Guzik to remove his post, and failing that, are now doing damage control. First off, might I ask why the W in your name is capitalized?

Anyway, let's get to the substance of your claims. First off, you claim you bought a 24 unit apartment building with "owner financing". Please refer us to the county and state where your deed is recorded for this deal so we can verify that you aren't full of hot air. Likewise, please refer us to the county and state where the rest of your 75 unit portfolio is located, and the name of your company if the properties aren't recorded in your name.

Second, you say that "Bottom line, I'm really glad i found this post because it tells me that our brand, The Kwak Brothers, is growing." No, no it doesn't. It means you're trying to scam people, and they're telling other people about your scammy ways. However, if you are able to post any proof whatsoever that you actually invest in real estate, you might be able to allay some of Mr. Guzik's concerns. On the other hand, if all you're doing is selling expensive real estate classes while knowing nothing about real estate yourself, then that's called being a scammer. Only you can prove which one it is, and I think this is the ideal forum for you to do so.

If you are actually an immigrant who is just trying to make it, as you claim, then that's great and I'm all for it. However, you must prove you have something to offer and aren't just using pressure sales tactics to sell things to people while having no real knowledge yourself (all too common in the "real estate guru" space).

I eagerly await your reply.