Subject To - Attorney General sues couple AND their LLCs for equity skimming

[Account Closed]

Here is a case of Subject To done as taught today by some "guru"s. If you are going to do Subject To", which is legal if done legally and wisely, then learn from someone who understands the laws, to keep you out of trouble. You can be sued for up to 6 years after the transaction (actually longer, but that gets into the minutia. They used a form of "Gator Lending"

Be careful out there. You don't know, what you don't know.

Click on the images to expand.

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Attorney General Rob McKenna and Assistant Attorney General Jack Zurlini filed new documents today in Spokane County Superior Court that accuse Anthony and Alicia Napier of skimming equity from distressed homeowners in Eastern Washington and misleading investors. 

It’s alleged their dirty deals left a trail of victims – families who lost their homes, renters who never recouped security deposits and investors who never saw profits.

[Jay Hinrichs]

Quote from @Bonnie Low:

I'd love to see an analysis on this lawuit by someone who really knows how to do sub to deals legally to better understand where they went wrong and how to do things properly to avoid these problems. 

its impossible to fully insulate yourself on sub too and basically distressed rescue which is a vast majority of sub 2 deals.. I personally had a seller I  bought from in WA state in about 2005 ish sub too and they filed a complaint with the WA state AG.  these are scary events no doubt. They requested all my files on all my transactions in WA for the preceding 5 years.. ( which I was very active in VAncouver WA) so that was a few box's full.  Just the coping fee was not nothing.  Then you ship them all up to the state.. and you sit and wait.. they don't talk to you update you etc. If they are going to sue you .. you get whats posted.. they don't even tell you ( at least they did not tell me or my lawyer) that they were not pursuing anything they just do nothing. So your sitting there waiting for a bombshell that for me never came.  So no way to prevent it.. just have to  deal with it if it comes your way.. Sub too is  not that complicated.. If you tell the seller they only have 20k equity when they really have 100k  then you are opening yourself up right there for the equity skim.
If you fall on hard times.. IE  you bought sub 2 and put in a tenant that trash's and squats and now you cant make the payments and you trash the sellers credit  you will have an issue. If its a property in foreclosure in WA CA OR there are foreclosure rescue laws that must be followed and those make buying props in those states pretty un appealing if your flipping within the time lines in the law. And you cant rent back to the seller.. ( which is how I did all my foreclosure rescue sub 2s when it was legal)  and so on and so forth.