All Forum Posts by: Greg Lovern

A homeowner whose foreclosure auction date is this Feb 8th has agreed to sell to me Sub2. I am able to pay the reinstatement amount plus the monthly loan payments. The lender has agreed to accept the reinstatement amount to stop foreclosure up through the day before, Feb 7th. My plan is to resell quickly -- this is a preforeclosure flip.

But the homeowner had already brought in a real estate agent, and she is trying to talk me out of doing it this way though I've agreed to hire her as the seller's agent when I resell soon, and offered to sign with her now. She actually doesn't think Sub2 is really a thing -- she doesn't think it's possible to legally buy a property without paying off in full all loans secured by the property. But she came up with an interesting alternative suggestion that I wanted to run by the investors here.

Her idea is that I sign a contract with the homeowner to do the following:

 -- He quit-claims to himself and me, making us co-owners of the title. He is currently sole owner of the title.

-- I pay the reinstatement amount. 

-- We agree to sell the house (together) quickly.

-- He agrees in the contract that when the house is sold, I keep a fixed dollar amount in addition to being reimbursed for my reinstatement payment.

This has the advantage of only having one set of closing costs, and it's simpler. But I have these concerns:

1) What happens if he changes his mind and decides he doesn't want to sell? As 50% co-owner of the title, can I force the sale on my own?

2) Would this be legally defined as a loan, and so be subject to laws regulating loans, such as maximum allowed effective annual interest rate?

3) Are there any legal issues around doing it this way?

4) Quit-claim notices usually say that the consideration given in exchange for getting part ownership is $10, or $1, or love & affection. In this case, it seems to me it should say that the consideration is the $45,400.53 reinstatement amount. Is there any problem with that?

Can anyone recommend an escrow company to do a Sub2 deal in King County, Washington State?

A homeowner in foreclosure has agreed to sell to me Sub2. His auction date is Feb 8th. His lender has agreed to accept reinstatement amount to stop foreclosure.

If I buy a title report for a preforeclosure, is it still necessary to go to the county clerk's office and do due diligence? What do I need to look for that isn't included in a title report?

If I get both a title report and title insurance, what do I still need to look for myself on the title?

What are your thoughts about getting title insurance on a preforeclosure that I intend to flip within a few months? Smart precaution? Or waste of money?

If a loan is called due to a Due on Sale clause, how much time is allowed to pay off the loan before the lender files for foreclosure? (a day? a week? a month? etc.)

I'm looking at a non-judicial foreclosure auction coming up Feb 15th in King County, Washington State. Last October, there was a judicial foreclosure on the property by the HOA, with a 1-year redemption period.

Suppose someone other than the buyer of the first foreclosure buys the foreclosure coming up next month. What happens? Which buyer owns the property? What happens to the first foreclosure's 1-year redemption period?

Tom, I'm looking at the NTS. It lists a reinstatement amount of approximately $25K and a principal sum of approximately $350K. I've looked at hundreds of King County, Washington State NTS's and most that I've seen list a reinstatement amount, smaller than the principal sum shown.

Thanks Tom, but the Notice of Trustee Sale says that the reinstatement amount must be paid by Jan 7th (11 days before the auction), a week ago. So I think I need the lender to grant an extension.

Thanks Sam -- if I understand correctly, the owner will need to get the lender to postpone the auction, based on the fact that I have cash ready to reinstate. Is that correct?

A homeowner in King County, Washington State just contacted me a few minutes ago about selling me his home which is in non-judicial foreclosure. The auction date is this Friday morning, Jan. 18th. That gives me three business days before the auction.

When a homeowner contacts you this close to the auction date, do you start by trying to get the auction date postponed? What are the best steps to get a postponement quickly? How long of a postponement is considered reasonable to ask for?

Suppose you win for $272K, but you have cashiers checks for $280K. Do you get the difference back eventually?