All Forum Posts by: Rick Bradd

Rick Bradd has started 10 posts and replied 102 times.

Originally posted by K. Marie Poe:

Originally posted by Jon Holdman:

Notwithstanding the question of whether this maneuver is legal or not, if you were the note holder, then, yes, you could suffer a loss. In their example of the $300K note on a house now worth $150K, if you have bought that note for $300K, and they bought it from you for $120K, you would have a $180K loss. But then, you would have had to be pretty naive to have paid $300K for that not to start with.

Jon Holdman The OP's example just said what if he were the note holder in an ED situation. If the OP loaned $300K with a supporting appraisal in 2005, does that make him naive? Lots of banks and individuals out there holding notes on on upside down properties today. I'm not sure naivete was part of the equation. Greed and speculation, maybe. :)

Rick Bradd There's a lot that will have to happen before you'll be forced to take a loss as a lender via ED. Lots. Might not ever happen. ED is a court case followed by a court order. IMO, it's going to take some legal gymnastics for ED to extinguish multiple deed of trust without tendering full payment. An ED can force a sale (deed transfer) on the owner, but I'm not sure how it can force a lender to give up their right to full payment on the note and DOT. The instit. lenders will fight this and they have real legal dollars. It would be a huge legal precedent in CA for lenders to be forced to accept a short payoff via court order. It would have horrible unintended consequences for future lending in CA as well.

Hey thanks everybody, this is good feedback, I agree that its unlikely to happen, but with cities ( Politicians ) looking for revenue and coming up with ideas like these that could hurt investors its worth considering.

@k.Marie Poe, you nailed my thinking, what if several years down the road the housing market in a city took a dive and someone tried to "help" the home owner at the note holders expense, what would happen then..............

So that is why I posted the question, I wanted to hear opinions on the likelihood of such a thing actually happening, and I am thankful for the opinions of posters that I respect pretty much confirming what my own thoughts were.

Thanks again, BP is such a great source and I applaud all of you for sharing your knowledge, insight, hints and advise.

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Greetings, I have been lurking on BP for some time now trying to absorb as much knowledge as I can, I am primarily interested in learning to invest in notes. That said I have been following any news, forum updates and blogs and I came across this article that disturbs me, and I would like to know if anyone with more experience has any thoughts on how this might effect an investor who owns a note. Basically some So. California County's are considering using Eminent Domain laws to seize mortgages on under water properties, pay off the mortgages at a discount to the current homes value, and refinance the property at the new home value.

My concern and question is, if I were the note holder on a property and this were to happen, could (would) I lose my a chunk of my investment?

http://realestate.msn.com/can-your-city-seize-your-mortgage

Thanks everyone for for sharing your knowledge, i have really learned a lot.
Rick

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All Forum Posts by: Rick Bradd

Rick Bradd has started 10 posts and replied 102 times.

Post: Eminent Domain question

Post: Eminent Domain question