Post foreclosure bank charge off

Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes

Hi,

I am hoping to get a little information about what happens to a property after it is foreclosed on then later charged off. One of the units in my condo building was foreclosed on about 4 years ago. As far as I could tell from the recorded records the bank still owns the unit. I see where it went to a foreclosure sale in 2009 and the bank was the high bidder and bought it back at the sale. There are no other documents that I can find recoded since then in regards to this unit.

I contacted the bank recently as I was interested in buying the unit and they told me that they charged it off and no longer own it, that the previous owner who was foreclosed on owns it again. I asked if the owner was aware that they own it again and the bank said they may not know.

Full disclosure, I am also on the hoa board and the owner who was foreclosed on sued the hoa board and lost, so I would rather not contact her until I know for sure that she does own the unit again. Also no hoa dues have been paid for a long time as we have been sending the notices to the bank.

Does this all make sense, if the bank forecloses on you then later charges it off, do you regain ownership? If so should I be able to find something recorded stating this? And is it possible if all of that is true that the owner doesn't know that they own it again? What would you do in my situation?

Thanks

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Dion DePaoliPro Member

Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes

13y

Does this all make sense, if the bank forecloses on you then later charges it off, do you regain ownership?

It makes sense but there are common misunderstandings to the use of "Charge Off". A Charge Off is an accounting event where a loss is realized on the financials. The loan is deemed uncollectable and the balance in whole or part will be declared as a loss. A charge off can occur for any asset not just loans.

The charge off itself, is a function of realizing the loss and is not unique to loans that are foreclosed, either. The loss is what is realized. That loss can be recognized while the loan is still owned or after a loan sale or after foreclosure. All of those situations in the loan's life are different.

If I made a loan for $10 and I sell the loan for $8, I write off $2. (No foreclosure) If I decide to keep the same loan, but realize I will not collect all of the $10 but should collect $7, then I may write off $3. (some regulations apply)

When the loan goes to foreclosure sale, regardless of whether it sells at auction, the loan is written off. The loan itself is extinguish and no longer exists after the foreclosure sale event. The asset becomes real property. If the auction captures (sells the property) my $10, I have $0 in write off. If the auction captures $6, I have $4 in write off. If the auction does not sell the property and it reverts back to the Mortgagee the write off is $10. The loan is a complete loss. The real property is then put in as a new asset with a cost basis of the loan loss. When the real property sells that gain or loss is booked against the real property. The loan no longer exists.

So, the answer to the question, do you regain ownership?....NO. Unless you purchased the property at auction, the borrower is removed from title post foreclosure sale and redemption, if any.

If so should I be able to find something recorded stating this?

Well real property is within public record. So, you can certainly pull title on the property and see the last owner's chain of events. You will want to find the last recorded and unsatisfied mortgage and follow that through ownership changes by way of Assignments of Mortgage (or DOT) alone with Lis Pendens related to the foreclosure event. If the property was sent to auction then the result of that auction will be a Sheriff Deed or similar in either the name of the Mortgagee or a entity that purchased at auction. The borrower's interest are extinguished with the loan.

If you review the title of the property and the foreclosure action is not completed then the previous owner will still hold title to the property.

From time to time, a Mortgagee may not conclude foreclosure for various reasons.

And is it possible if all of that is true that the owner doesn't know that they own it again?

Yes. From time to time, borrowers have been known to vacate their property prior to the completion of foreclosure, redemption (if any) and eviction. Example would simply be a borrower who vacates after the first Notice of Default. If the borrower walks, they probably don't pay too much attention to weather the action finalizes, they simply assume it does. In some cities like Detroit, where it is really not uncommon to not finish a foreclosure, that can leave the property owner (borrower) liable. Which is also why the Mortgagee didn't finish foreclosure, they don't believe the liability of the property will be beneficial for their capital recovery.

What would you do in my situation?

Being on the board certainly helps. Initiating an HOA foreclosure will require pulling title on the property. That is really step one, so you can see what you are working with. Who is on title, what happened on title, etc. If you are not comfortable reading that on a title report, have an attorney help you.

The conversation you had with the bank tells you the bank wrote off the loan. That does not mean they finished foreclosure. It means as far as the bank is concerned they do not plan on recovering any more dollars from the loan. The could have sold the loan or they could simply just written it off and vacated or stopped pursuing the foreclosure action to its finality, which is auction. It is possible the person at the bank simply references the asset in accordance to how they have the asset on their financials.

The bank saying they wrote off the loan does not mean the lien is extinguished per se. It means the bank is not pursuing more recovery than they already have. So, a HOA foreclosure may still have to deal with the mortgage (or DOT) on title needing to be satisfied or extinguished by lack of redemption through the HOA foreclosure and depending on the laws of the state in relation to seniority of HOA liens. I suppose in that sense, technically, a bank could write the loan off and still pursue remedies once the HOA takes action or whenever they want (within limitation statutes in regards to collection).

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Robert Brubaker
Involved In Real Estate · West Palm Beach, FL · Member since 2008 · 104 posts · 17 votes
13y
Sounds like a perfect opportunity for your Association to

Lien and then Forclose on the Unit. Owned without a 1st Mortgage

Forclosure pending they might be able to even sell the unit!

Best bet is to take what you have to a Lawyer skilled

in "Community Association Law" and see if you have such an

opportunity or other option! Going this route will allow your

association to recoup losses from the years of non-payment

and get the unit paying again! Get the help you need!

Best for Success
0 Reply
Simon Campbell
Miami, FL · Member since 2012 · 612 posts · 189 votes
13y
Yes I would have to agree here. Having the HOA foreclose on the unit for non-payment of fees seems reasonable. But the hard part here is that you have to notify someone of your intent to foreclose. If there was a transfer back to the original owner then there must be something in the county records. I would pursue sending notification to whomever the county says is paying the taxes.
0 Reply
Ibrahim Hughes
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
13y
Check the county's deeds and see if there was a deed conveying the property from the bank back to the owner.
0 Reply
Dion DePaoliPro Member
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Does this all make sense, if the bank forecloses on you then later charges it off, do you regain ownership?

It makes sense but there are common misunderstandings to the use of "Charge Off". A Charge Off is an accounting event where a loss is realized on the financials. The loan is deemed uncollectable and the balance in whole or part will be declared as a loss. A charge off can occur for any asset not just loans.

The charge off itself, is a function of realizing the loss and is not unique to loans that are foreclosed, either. The loss is what is realized. That loss can be recognized while the loan is still owned or after a loan sale or after foreclosure. All of those situations in the loan's life are different.

If I made a loan for $10 and I sell the loan for $8, I write off $2. (No foreclosure) If I decide to keep the same loan, but realize I will not collect all of the $10 but should collect $7, then I may write off $3. (some regulations apply)

When the loan goes to foreclosure sale, regardless of whether it sells at auction, the loan is written off. The loan itself is extinguish and no longer exists after the foreclosure sale event. The asset becomes real property. If the auction captures (sells the property) my $10, I have $0 in write off. If the auction captures $6, I have $4 in write off. If the auction does not sell the property and it reverts back to the Mortgagee the write off is $10. The loan is a complete loss. The real property is then put in as a new asset with a cost basis of the loan loss. When the real property sells that gain or loss is booked against the real property. The loan no longer exists.

So, the answer to the question, do you regain ownership?....NO. Unless you purchased the property at auction, the borrower is removed from title post foreclosure sale and redemption, if any.

If so should I be able to find something recorded stating this?

Well real property is within public record. So, you can certainly pull title on the property and see the last owner's chain of events. You will want to find the last recorded and unsatisfied mortgage and follow that through ownership changes by way of Assignments of Mortgage (or DOT) alone with Lis Pendens related to the foreclosure event. If the property was sent to auction then the result of that auction will be a Sheriff Deed or similar in either the name of the Mortgagee or a entity that purchased at auction. The borrower's interest are extinguished with the loan.

If you review the title of the property and the foreclosure action is not completed then the previous owner will still hold title to the property.

From time to time, a Mortgagee may not conclude foreclosure for various reasons.

And is it possible if all of that is true that the owner doesn't know that they own it again?

Yes. From time to time, borrowers have been known to vacate their property prior to the completion of foreclosure, redemption (if any) and eviction. Example would simply be a borrower who vacates after the first Notice of Default. If the borrower walks, they probably don't pay too much attention to weather the action finalizes, they simply assume it does. In some cities like Detroit, where it is really not uncommon to not finish a foreclosure, that can leave the property owner (borrower) liable. Which is also why the Mortgagee didn't finish foreclosure, they don't believe the liability of the property will be beneficial for their capital recovery.

What would you do in my situation?

Being on the board certainly helps. Initiating an HOA foreclosure will require pulling title on the property. That is really step one, so you can see what you are working with. Who is on title, what happened on title, etc. If you are not comfortable reading that on a title report, have an attorney help you.

The conversation you had with the bank tells you the bank wrote off the loan. That does not mean they finished foreclosure. It means as far as the bank is concerned they do not plan on recovering any more dollars from the loan. The could have sold the loan or they could simply just written it off and vacated or stopped pursuing the foreclosure action to its finality, which is auction. It is possible the person at the bank simply references the asset in accordance to how they have the asset on their financials.

The bank saying they wrote off the loan does not mean the lien is extinguished per se. It means the bank is not pursuing more recovery than they already have. So, a HOA foreclosure may still have to deal with the mortgage (or DOT) on title needing to be satisfied or extinguished by lack of redemption through the HOA foreclosure and depending on the laws of the state in relation to seniority of HOA liens. I suppose in that sense, technically, a bank could write the loan off and still pursue remedies once the HOA takes action or whenever they want (within limitation statutes in regards to collection).

4 Reply
Dion DePaoliPro Member
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Another quick note. When the HOA initiates a foreclosure, the foreclosing attorney you employ will pursue the proper notifications per statute. Foreclosures still take place when the owner is not able to be located and served directly. For instance, Public Notice may suffice.
1 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
My experience says that quite a few owners/borrowers are walking away from properties because they assume the foreclosure is right around the corner. Then bank doesn't foreclose.... sometimes for years. Then HOA judgments or tax defaults or muni abatements get the attention of investors who contact the owners.

You say in your post that the property went back to the bank, then you say the bank says they don't own it. A charge-off doesn't have anything to do with ownership or the foreclosure, it's an accounting thing. Was the sale reversed or invalidated? Did the borrower file BK? That's the thing I'm seeing. Stalled or reversed sales because of BK filings, and then the bank doesn't finish or redo the foreclosure even when the BK is discharged. I'd get a title report to confirm if the borrower is still the owner of record, and if the mortgage was really foreclosed and/or if the lien has been released.
2 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by Dion DePaoli:
Does this all make sense, if the bank forecloses on you then later charges it off, do you regain ownership?

It makes sense but there are common misunderstandings to the use of "Charge Off". A Charge Off is an accounting event where a loss is realized on the financials. The loan is deemed uncollectable and the balance in whole or part will be declared as a loss. A charge off can occur for any asset not just loans.

The charge off itself, is a function of realizing the loss and is not unique to loans that are foreclosed, either. The loss is what is realized. That loss can be recognized while the loan is still owned or after a loan sale or after foreclosure. All of those situations in the loan's life are different.

If I made a loan for $10 and I sell the loan for $8, I write off $2. (No foreclosure) If I decide to keep the same loan, but realize I will not collect all of the $10 but should collect $7, then I may write off $3. (some regulations apply)

When the loan goes to foreclosure sale, regardless of whether it sells at auction, the loan is written off. The loan itself is extinguish and no longer exists after the foreclosure sale event. The asset becomes real property. If the auction captures (sells the property) my $10, I have $0 in write off. If the auction captures $6, I have $4 in write off. If the auction does not sell the property and it reverts back to the Mortgagee the write off is $10. The loan is a complete loss. The real property is then put in as a new asset with a cost basis of the loan loss. When the real property sells that gain or loss is booked against the real property. The loan no longer exists.

So, the answer to the question, do you regain ownership?....NO. Unless you purchased the property at auction, the borrower is removed from title post foreclosure sale and redemption, if any.
If so should I be able to find something recorded stating this?

Well real property is within public record. So, you can certainly pull title on the property and see the last owner's chain of events. You will want to find the last recorded and unsatisfied mortgage and follow that through ownership changes by way of Assignments of Mortgage (or DOT) alone with Lis Pendens related to the foreclosure event. If the property was sent to auction then the result of that auction will be a Sheriff Deed or similar in either the name of the Mortgagee or a entity that purchased at auction. The borrower's interest are extinguished with the loan.

If you review the title of the property and the foreclosure action is not completed then the previous owner will still hold title to the property.

From time to time, a Mortgagee may not conclude foreclosure for various reasons.

And is it possible if all of that is true that the owner doesn't know that they own it again?

Yes. From time to time, borrowers have been known to vacate their property prior to the completion of foreclosure, redemption (if any) and eviction. Example would simply be a borrower who vacates after the first Notice of Default. If the borrower walks, they probably don't pay too much attention to weather the action finalizes, they simply assume it does. In some cities like Detroit, where it is really not uncommon to not finish a foreclosure, that can leave the property owner (borrower) liable. Which is also why the Mortgagee didn't finish foreclosure, they don't believe the liability of the property will be beneficial for their capital recovery.

What would you do in my situation?

Being on the board certainly helps. Initiating an HOA foreclosure will require pulling title on the property. That is really step one, so you can see what you are working with. Who is on title, what happened on title, etc. If you are not comfortable reading that on a title report, have an attorney help you.

The conversation you had with the bank tells you the bank wrote off the loan. That does not mean they finished foreclosure. It means as far as the bank is concerned they do not plan on recovering any more dollars from the loan. The could have sold the loan or they could simply just written it off and vacated or stopped pursuing the foreclosure action to its finality, which is auction. It is possible the person at the bank simply references the asset in accordance to how they have the asset on their financials.

The bank saying they wrote off the loan does not mean the lien is extinguished per se. It means the bank is not pursuing more recovery than they already have. So, a HOA foreclosure may still have to deal with the mortgage (or DOT) on title needing to be satisfied or extinguished by lack of redemption through the HOA foreclosure and depending on the laws of the state in relation to seniority of HOA liens. I suppose in that sense, technically, a bank could write the loan off and still pursue remedies once the HOA takes action or whenever they want (within limitation statutes in regards to collection).

In this situation the bank had to have completed the foreclosure process as it went to a foreclosure / sheriff sale. I was able to find the recorded documents showing that the bank was the high bidder at the sheriff's sale so unless I am miss understanding something here, the bank foreclosed on the unit and was the high bidder at the sale so the bank took ownership of the property away from the unit owner b/c it was the high bidder at the sale.

The person I spoke with at the bank told me that the bank then "charged off" the property (after they won it back from the foreclosure sale). I asked who owns it now and she said that when the bank charged it off that the ownership of the unit went back to the original owner who was foreclosed on.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by Robert Brubaker:
Sounds like a perfect opportunity for your Association to

Lien and then Forclose on the Unit. Owned without a 1st Mortgage

Forclosure pending they might be able to even sell the unit!

Best bet is to take what you have to a Lawyer skilled

in "Community Association Law" and see if you have such an

opportunity or other option! Going this route will allow your

association to recoup losses from the years of non-payment

and get the unit paying again! Get the help you need!

Best for Success

Thanks for the information. This happened in Alabama so I will need to check to find out if the laws in Alabama allow the HOA to foreclose on liens from unpaid HOA dues. I know here in Louisiana that is not the case.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by K. Marie Poe:

You say in your post that the property went back to the bank, then you say the bank says they don't own it. A charge-off doesn't have anything to do with ownership or the foreclosure, it's an accounting thing. Was the sale reversed or invalidated? Did the borrower file BK? That's the thing I'm seeing. Stalled or reversed sales because of BK filings, and then the bank doesn't finish or redo the foreclosure even when the BK is discharged. I'd get a title report to confirm if the borrower is still the owner of record, and if the mortgage was really foreclosed and/or if the lien has been released.

When I search the public records for the original owners name I found a Foreclosure Deed that was recorded and said that unit went to a foreclosure sale and that the bank was the highest bidder. So this unit was foreclosed on. I contacted the bank that foreclosed on the unit (and won it back at the foreclosure sale) and spoke with someone there who said that they no longer own the unit. It took them about 45 minutes to research it, I asked multiple times and she specifically said:

- The bank no longer owns this property.

- The bank "charged it off".

- The original owner now owns it again.

I even asked how that was possible, someone doesn't pay their mortgage and owes the bank a lot of money, gets foreclosed and then the bank just gives it back to them?? She said "yes".

When I search the public records by the original owner's name I can not locate any recorded documents after the date of the foreclosure sale. So if she was given the property back I am unable to located anything in public records to confirm this.
0 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
I say you are getting bad, super bad, info from the bank. There is no reverting or giving back properties to foreclosed borrowers without supporting recorded documentation or a court order. Get a title report to see what a title company thinks of the situation. Specifically, who is the owner of record and are there any outstanding liens.

That being said, have you checked the court records to see if the borrower sued the lender in a law suit separate from the foreclosure? You said she sued the HOA, so maybe she went wild with one of those crazy produce-the-note or predatory lender complaints. If she prevailed and got a court order awarding her the property, but didn't record it, that could explain the confusion. But, that is so far out and unlikely, I can't believe I could even come up with that.

IMO, you really need to stop reading the county indexes and docs and get a title company to tell you their take. Its all guess work until you know what is insurable and what's going on from their perspective.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by Simon Campbell:
Yes I would have to agree here. Having the HOA foreclose on the unit for non-payment of fees seems reasonable. But the hard part here is that you have to notify someone of your intent to foreclose. If there was a transfer back to the original owner then there must be something in the county records. I would pursue sending notification to whomever the county says is paying the taxes.

That's even more of a twist, neither the bank nor the original owner are paying the taxes. When I looked up the tax records to see who had been paying taxes I can see where the original owner paid the taxes up till the point it was foreclosed on. Then it lists the bank's name for 1 year (with no payment made) then there is a company name listed for the couple years after that. So what it looks like to me is that when the bank charged it off they obviously didn't pay the property taxes so it went to a tax sale and was purchased at tax sale by the company that is listed on the tax rolls currently. I just figured the bank hadn't been paying taxes up until recently when I found out that they claim they no longer own it and charged it off. So it makes sense then that they would have not paid the taxes, causing it to go to a tax sale.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by K. Marie Poe:
My experience says that quite a few owners/borrowers are walking away from properties because they assume the foreclosure is right around the corner. Then bank doesn't foreclose.... sometimes for years. Then HOA judgments or tax defaults or muni abatements get the attention of investors who contact the owners.

You say in your post that the property went back to the bank, then you say the bank says they don't own it. A charge-off doesn't have anything to do with ownership or the foreclosure, it's an accounting thing. Was the sale reversed or invalidated? Did the borrower file BK? That's the thing I'm seeing. Stalled or reversed sales because of BK filings, and then the bank doesn't finish or redo the foreclosure even when the BK is discharged. I'd get a title report to confirm if the borrower is still the owner of record, and if the mortgage was really foreclosed and/or if the lien has been released.

If a foreclosure deed is recorded, showing that the property went to a foreclosure sale and the bank was the high bidder and purchased the property back, wouldn't that mean that the foreclosure was completed? Can you reverse the sale after you win it at the foreclose sale? If yes, wouldn't something have to be recorded to show this as public record?

Because of privacy issues the bank would not give me additional information, if the owner had filed BK, etc. They just said that they no longer own the property b/c it was charged off and that the original owner now owns it.

I'll have to hire someone to do a title report but if I can't find anything recorded other than the foreclosure deed, would the person doing the title report be able to find anything else?
0 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
The point of title reports isn't to find something else, it's to get the insurer to agree to a insure the way it is. For example, if based on their report the title company says the bank owns it, they would require a deed or court order to transfer it from the bank to the next owner.

But now you're bringing up stuff about tax sale. I don't know AL tax sale law, but if someone else owns the tax certs or has taken it back via tax deed sale, then we are all on the wrong track. There could have been a redemption, could have been a whole host of things. Pretty sure a title report could confirm any property tax sale issues and how they affect title.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by K. Marie Poe:
The point of title reports isn't to find something else, it's to get the insurer to agree to a insure the way it is. For example, if based on their report the title company says the bank owns it, they would require a deed or court order to transfer it from the bank to the next owner.

But now you're bringing up stuff about tax sale. I don't know AL tax sale law, but if someone else owns the tax certs or has taken it back via tax deed sale, then we are all on the wrong track. There could have been a redemption, could have been a whole host of things. Pretty sure a title report could confirm any property tax sale issues and how they affect title.

The tax sale part does not concern me, yet anyway. Alabama has a 3 year redemption period and there is still a good bit of time before that will expire. So this property could be redeemed by the original owner, but finding out who actually owns it is what my main issue is here.

The bank says they don't own it but I can not find anything recorded after the foreclosure deed where the bank won it at auction. Right now, my first step is to try to figure out who owns it. Then I can proceed from there. I will contact a title company to do a title search, I was just unsure if they would be able to find anything that I can not find in the public records.
0 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
13y
Originally posted by K. Marie Poe:
I say you are getting bad, super bad, info from the bank. There is no reverting or giving back properties to foreclosed borrowers without supporting recorded documentation or a court order. Get a title report to see what a title company thinks of the situation. Specifically, who is the owner of record and are there any outstanding liens.
That being said, have you checked the court records to see if the borrower sued the lender in a law suit separate from the foreclosure? You said she sued the HOA, so maybe she went wild with one of those crazy produce-the-note or predatory lender complaints. If she prevailed and got a court order awarding her the property, but didn't record it, that could explain the confusion. But, that is so far out and unlikely, I can't believe I could even come up with that.
IMO, you really need to stop reading the county indexes and docs and get a title company to tell you their take. Its all guess work until you know what is insurable and what's going on from their perspective.

Thanks for all of the information. I checked the online public records for this county for the original owners name and the last result found was the foreclosure deed, there is nothing else recorded in her name after that date (which was in 2009). I will hire a title company to see if they can figure out who owns it.
0 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
If it were me, and I wanted the property, I'd be very concerned about the tax sale and the tax certificate owner's plans. You said the property went to foreclosure in 2009 and lender took it back. Therefore bank was the owner in 2009, borrower is out of the picture. You said taxes went unpaid for a year and then a company paid off defaulted taxes and gets a tax cert, which would be about in 2010 or so. Bank, as owner, has 3 years in AL to redeem. They didn't. Tax cert. owner gets the property if owner doesn't redeem in 3 years. They can now turn in their cert. for a deed. Looks to me the like the cert. owner is soon to be the owner.

0 Reply
Simon Campbell
Miami, FL · Member since 2012 · 612 posts · 189 votes
12y
Originally posted by Will Sifert:

As you mentioned, the key here is to (1) find out who currently legally owns the property and (2) if either the foreclosure or the tax sale is in a redemption period.

You mentioned that there "is a company name listed" on the tax records. That is a place to start. Often lenders transfer the paying of property taxes on their foreclosure properties to outside companies which are listed on the tax records so that the bill is sent to them. This does not necessarily mean that the bank no longer owns the property.

A title search will cost you only about $100. In the end, it really does not matter who says what (bank "we do not own the property."). If the last recorded deed is the foreclosure document - then guess what, the bank owns the property whether they want it or not.

Obviously, if they do not want the property I doubt that they will put up much of a fight if you foreclose on them for non-payment of HOA dues.
0 Reply
Grant Belgrave
Fort Lauderdale, FL · Member since 2014 · 7 posts · 4 votes
12y
Any update to this situation?
0 Reply
Simon Campbell
Miami, FL · Member since 2012 · 612 posts · 189 votes
12y
I was rereading over this post and came up with another slant. Why not track down the original owner who was foreclosed on. What may have happened is that after foreclosure, the bank just decides it is not worth the hassle to sell the property and they just wiped the slate clean and "gave it back." Crazy yes but it does happen.

But, since the homeowner hates the bank for foreclosing, they very well could have thrown out any communication from the bank before even opening the letter - not realizing that they received a release of the bank's interest.

Now you come in as they "by the way I found something interesting about your old house that you may want to know..." You work with him to request that they send another copy of the release. This gets recorded.

You work with the owner to redeem the property from the tax sale. This gets recorded.

You hand the guy a check for $10,000 for his time and hassle in exchange for deeding the property to you. Everyone is happy! Problem solved.
1 Reply
Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
12y
Originally posted by @Grant Belgrave:
Any update to this situation?

Actually, I had just logged in to make a post about this and forgot that I had this one already started. I gave up on trying to get in touch with someone last year, however my business partner decided he was interested and would give it a try recently. He asked me to post some questions here to see if he could get some help. From what he has mentioned to me, he was able to get in touch with someone from the bank who is trying to help him, but they have their hands tied because of "privacy" issues. He isn't asking for any private information, just simply "will you sell it and if so for how much?"

The BOA representative that he got in touch with has indicated that they are waiting approval from a manager before they can give out the contact information of the "internal contact" of the correct person for him to speak with. They go on to say that "It is a unique situation and they need to get in touch with the right department to advise them how to proceed." It's not like he is asking for the previous owners name or how much their mortgage was when they defaulted. All of that information is public record and he already has it any way.

Sounds like BOA may have charged it off or moved it to another department but they are scared to say anything due to privacy laws. Which I can understand privacy laws but for the love of god, is it a privacy violation to say " talk to Mr. Smith in our xxx department, he will be able to let you know how to go about buying this property from us" etc.

I would think the bank would be trying to sell it or at least happy to get rid of it. They haven't paid the taxes on it since they took the property back at the foreclosure sale. Which triggered a tax sale back 2011 and in a couple months they are about to lose the property to the person who purchased their tax deed. All of this has been explained to them as well, but it is like trying to talk to a goverment agency. These companies are run terribly and they don't give a ****.
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Will Sifert
OP
Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
12y
From everything I have been told you can't just give something back without going through the property legally steps, which in this case would be a quit claim deed. If that would have happened, it should have been recorded which I wasn't able to find anything so I don't think that is the case. Also, the person he is talking to now makes it sound like the bank does own the property but they wont say which department is in charge of it or who to talk to because of "privacy" issues!

Originally posted by @Simon Campbell:
I was rereading over this post and came up with another slant. Why not track down the original owner who was foreclosed on. What may have happened is that after foreclosure, the bank just decides it is not worth the hassle to sell the property and they just wiped the slate clean and "gave it back." Crazy yes but it does happen.

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Simon Campbell
Miami, FL · Member since 2012 · 612 posts · 189 votes
12y
What I mean by giving it back is that at times the lender will mail the original homeowner a release of mortgage notification before the foreclosure process is complete or they actually do deed the property back. I have even seen instances where they require the original homeowner to record the documents. Why? Don't ask me. But I have seen it done.

Often by this time, the homeowner is fed up with seeing notices from the lender and just chucks them without even opening the letter. Never knowing that they just received their home back.
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