All Forum Posts by: Josh D.

Does anyone know what the IRS's standards are for releasing tax liens on properties that are underwater?

I've got an approval on a property at $605K that appraises at $830K. The outstanding first mortgage is over $1M.

Will the IRS think there's equity because of my purchase price vs. the appraised price or are they strictly comparing appraised price with the outstanding 1st mortgage?

Thanks

JD

Thanks guys, your input is always appreciated.

Has anyone ever dealt with Discover/Morgan Stanley HELOC's?

The balance is about $50K, I've budgeted $5K for them to settle and have initially offered $1K.

Thanks!

My mom recently worked for an asset manager of REO property and she told me they used REO trans at her company. I think the banks are moving the short sale process to REO Trans to streamline the approval process and not to steal your deals. I wouldn't worry about it.

Well, I know a lot of desperate realtors.... :wink: but you are probably right, better to act as the investors buying agent, pick up 3% on A-B and 3% as selling agent on B-C

I wanted to get everyone's opinion regarding Realtors and A-B B-C short sale flips. Let me give you the scenario.

A Realtor contacts a distressed homeowner. Consults them on their situation and the homeowner determines a short sale is their only way out of foreclosure. The Realtor works with an investor who regularly buys short sales. The Realtor tells the homeowner this and that they can get a contract in 24 hours. The homeowner and Realtor execute a listing agreement with the Realtor collecting a full 6% commission. The next day the Realtor delivers a contract to the homeowner which is executed for a price of X. The negotiation is contracted out to a 3rd party negotiator and the Realtor immediately lists the property on MLS for the investor at a higher price. Before the negotiation is finalized the Realtor receives offers from C buyers for a higher price than the A-B contract price.

Because the Realtor has a listing agreement is the Realtor obligated to inform the lender of these higher priced offers before the negotiation is finalized?

What if the Realtor's listing agreement, here in Florida, is one of "No Broker Relationship" with the homeowner?

I'm sure you heard about the pair in Connecticut who were recently indicted on mortgage fraud. I wanted to make sure what I described is legal. I did some research and found the indictment which I linked to in this post. They were obviously doing all kinds of bad things (non-disclosure, non-arms length buyers, etc.) but the indictment says the accused "made material misrepresentations to financial institutions about the price buyers had offered to pay for real property."

Would failing to inform the lender of subsequent offers be considered a material misrepresentation?

I can't seem to find any guidance on this and thought someone may have already discussed this with investors, attorneys or the FBI themselves.

http://www.mortgagefraud.org/storage/natera_indictment.pdf

I located the actual indictment for those two in Connecticut.

http://www.mortgagefraud.org/storage/natera_indictment.pdf

It looks as though the main complaint is the transactions were not arms length, they were Realtors and had the duty to disclose the higher offers while negotiating the short sale, and then profited from it by participating as the low ball buyers.

Does this mean one can not have a higher offer without disclosing the actual price of that offer?

I'd be interested to hear some of the other members feedback after analyzing the document.

Justin- When negotiating the short sale with the bank how do you get them to accept a low price, say $100K when you tell them you have a contract to immediately sell it for more?

And does the bank ever ask you what the actual price is of your B-C contract?

Thanks

Justin thanks for all your feedback, I still had this question:

How do you sell that to the banks when negotiating a short sale they say is too low? Do they ever ask you the exact numbers?

Thanks

How do you sell that to the banks when negotiating the short sale? You tell them you are going to add value with a remodel or what?



A time frame on what?



I'm still not clear on what's the benefit of the trust?

To get around the addenda I'm thinking one could advertise the property, tell interested buyers you can't enter into a contract yet but will take their contact info, then the day you close, call them up and tell them its available. What do you think?

Thanks for your feedback Justin.

I'm not using an option contract or a trust. Whats the advantage there? Can you tell me about that?

I've just got an LLC as the buyer and using a regular Florida Association of Realtors contract with some extra disclosures and provisions.

I heard from a title attorney last week that the banks are making people sign those addenda stating no other transactions were in the works.

Justin- Have you experienced the banks requiring those addenda?

If this becomes the standard it is going make the investments much more risky (requiring one to close w/o a buyer lined up), require a lot more capital and drag out the holding time substantially, this could destroy my business model.

Any thoughts?