All Forum Posts by: Jacob Beg

Do you consider any compensatory factors? May be I am old school and like to hear the full story. Going by gut feel, I have rented to tenants with poor credit without any serious issue. 

In our locale, their tend to be a lot of marginal credit individuals with good gov't jobs so  I tend to see the job stability as a good factor. 

And what about section 8 tenants? Do you insist on good credit or are is there a diff criteria for them? 

 @Joe S. That depends on the quality of your property manager. I had to pull mine away from the property managers as they were adding no value at all. Repairs were carried out at an exceptionally high rate and I never regretted my decision. I am sure there are much better ones out there. 

So the lady never came back and I think I def dodged a bullet. It appears there is someone out there with the same name as the "HR Manager" with a serious criminal history. While I can't be certain its the same person, the fake pay checks is real shady and I agree with the other poster about someone having to go to a check cashing place while claiming to make 80K. 

I had a rental application from someone with poor credit. She furnished paystubs showing a very handsome salary and was more than qualified, willing to make two months security deposit and start the lease immediately meaning immediate cash-flow. 

She produced a guarantor who had a marginal, but steady job and a poor credit as well. 

She went to the property a few times, wanted landlord to fix numerous items which are expected of any genuine tenant as most people like to have a decent place and want things fixed if they are paying a handsome rent in excess of $2k.

I wanted to rent it quickly so keen to work with her but something did not sit well with me. I realized she was using some sort of app for phone number (not a proper mobile number). I am not that tech savvy but figured she might have good reasons. 

He previous landlord was deceased, she said it was her aunt anyway so no real way to check reference and she was staying with mom. She slipped up that mom had a decent gov't job, but would not produce her as a guarantor. 

Lease was ready, keys almost ready to be handed in as I got seduced by the funds. I had a gut feeling something was off. I questioned that I cannot find her employer other than a website. The person verifying the income seemed like someone who may know the lady. Income verified was different to what was on the pay stub. 

When questioned when she got paid last and whether she can produced a pay check. She stuttered last pay check was in Aug yet claims that she gets paid biweekly. When asked whether she produced a bank account to show track record of her income being deposited, she claimed she cashes her checks so no deposits to show. 

At this point, I had a gut feeling that the employer is either a fake or something else is off. There is also an issue of someone making close to 80K but the employer is based out of a very small office in not so good area of town. 

I asked for W-2 so may be there will be federal tax ID to show that employer is genuine. I don't think she will be able to furnish it. 

So did I miss a bullet or was it someone who could probably afford the place (hence the large deposit and prorated rent of 5K) but went the wrong way about it. Or did my suspicion got the best of me? 

 

Hi All:

I am looking for some ideas. I recently purchased a property from a foreclosure trustee sale in MD. In my experience, most of the foreclosed owners cooperate or at least engage in some sort of discussion with the new purchasers to figure out a dignified exit or perhaps a negotiated cash for keys scenario.

With the recent purchase, I left various messages and posted letters at the front door asking for a call back to discuss the living arrangement. I then ended up serving an abandonment notice but no one contacted me. I have been to the property since serving of the abandonment notice and there is a barking mad pit-bull in the property so though the occupants have made no contact, there appear to be someone living at the property who is unwilling to engage or is at least feeding the dog.

The sale is not ratified yet. I prefer to get an appraisal done so I can borrow through FNMA but lack of access is hampering that plan. It appears to me that the occupants might just ride this out to the very end to get free accommodation which is not ideal at all. Any suggestions on getting access or how else to go by getting a response?

Thank you all for the insight. This is perhaps a cautionary tale of using a competent attorney led settlement firm. All of this should have been dealt with the settlement attorney or could have alleviated  my concerns versus using vague or misleading language suggesting that the balance is payable by because the COA says there is a balance owed. I take Tom's point on board about what a settlement firm is supposed to do versus asking me to carry out the tasks that they will be paid for.  

@Tom Gimer Thanks for the input. I checked and you are right that the association recorded several liens but all of them are outranked by the 1st Trust which is in first priority. I am not even sure why the settlement company suggested a payment to begin with. I forwarded the aforesaid statue to the settlement company and their response is, "You should be able to, push on the HOA to get them to release the backdues by showing them the statute. But, you definitely need to pull the foreclosure attorney's docs first, to make sure that the HOA was given notice."

Isn't this the sort of thing that the settlement company does? I have never had a settlement agent ask that I carry out the due diligence to ensure that the foreclosure process was followed correctly. Is there even a need to engage with HOA here? From Title Insurance perspective, do you think this can put a cloud in some way.

Thanks again!

@Jana-  I have flipped properties without title insurance. However, I ran into a serious issue once where title insurance saved the day and I have newfound appreciation for it. It was supposed to be a quick flip of a property we purchased at the trustee foreclosure auction. Previous homeowner brought a suit after we settled on the property claiming that the foreclosed trust should have never been foreclosed upon as it was paid off already (it was a lie). His reasoning stemmed from the fact that an erroneous release of lien certificate was filed with the court and somehow the settlement company missed it as well. Long story short, the suit was thrown out at an early stage but the title insurance picked up the litigation costs and it took over 8 months. What was supposed to be a profitable deal turned out to be a loser as we were reluctant to spend money to renovate the place without a disposal. 

Russell- I have not acquired legal title yet, only have an equitable title by virtue of a the trustee sale. I would love to hear informed opinions. It appears Wayne may be right that the HOA attorney is attempting to maximize recovery for the HOA, however, MD law appears pretty straightforward. I am alarmed because the settlement attorney handling the sale suggested that I negotiate this amount with HOA and that he has seen others negotiate this amount. This indicates to me that either I am entirely wrong in reading the law or hopefully the settlement attorney is completely wrong meaning he was misadvising others about their liability.

I have a similar issue in MD. If your lien is a junior lien, it should get wiped out. Here in MD, the state law gives condo/hoa fee a super-lien status allowing them to collect no more $1200. 

Your real concern seem to be whether the lien will survive the foreclosure and I believe it won't unless the statue expressly says something about super-lien status of condo/hoa dues like it does in MD. Even if your lien is wiped out, have you considered whether the outstanding debt will cause any issues in getting title insurance especially if your client is depending on a mortgage? I am having that issue just now and am making queries.

Have you posed this question to a settlement company that you routinely use as their attorney's should be able to answer this at no cost if you have a relationship or will be referring the case to them? I imagine you can ask the trustee/auctioneer the same question. My point is that unless a statue grants or exempts condo fee special collection powers you are likely to be safe.

Trustee's auction contract states, "The property will besold subject to all conditions, liens, restrictions and agreements of record affecting same including any condominium and ofHOA assessments pursuant to Md Real Property Article 11-110." 

The Article being referred to is:

2015 Maryland Code
REAL PROPERTY
Title 11 - MARYLAND CONDOMINIUM ACT
§ 11-110 - Common expenses and profits; assessments; liens

(2) In the case of a foreclosure of a mortgage or deed of trust on a unit in a condominium, a portion of the condominium's liens on the unit, as prescribed in paragraph (3) of this subsection, shall have priority over a claim of the holder of a first mortgage or a first deed of trust that is recorded against the unit on or after October 1, 2011.

(3) The portion of the condominium's liens that has priority under paragraph (2) of this subsection:

(i) Shall consist solely of not more than 4 months, or the equivalent of 4 months, of unpaid regular assessments for common expenses that are levied by the condominium in accordance with the requirements of the declaration or bylaws of the condominium;
(ii) May not include:

1. Interest;
2. Costs of collection;
3. Late charges;
4. Fines;
5. Attorney's fees;
6. Special assessments; or
7. Any other costs or sums due under the declaration or bylaws of the condominium or as provided under any contract, law, or court order; and

(iii) May not exceed a maximum of $1,200.

Reading the statue, it appears I am off the hook as the foreclosed trust was pre Oct 2011. I am not sure if the said debt attaches to the property as any junior lien will be wiped out due to foreclosure. In MD, the highest bidder is responsible for condo/HOA dues from the date of the sale so I am responsible for that.

I am not sure if it is right to say that the property's title is uninsurable due to this. Effectively, that renders this property non-mortgageable unless that balance is paid off. I wonder what are the caveats if I buy it cash and just keep renting it for the long term versus flipping because cashflow is quite good. 

Hi All-

Generally, I stay away from purchasing condos at trustee auctions. I purchased one recently and it appears to have 25K worth of past due condo fee. There was a junior condo lien recorded against the property for a much smaller amount but I figured it will be wiped out. MD statute indicates that if the foreclosing deed was recorded after Oct, 2011 condo assoc can collect no more $1200 as a superior lien-this is not applicable here as the foreclosing trust was recorded prior to 2011. 

The settlement company is suggesting that I have to pay 25K. I am getting a mortgage on the property and required to get Title insurance. It's been suggested that unless that amount is paid, I cannot get title insurance. Does that sound right?

And is it worth purchasing it in cash without title insurance as I plan to flip it in two months? Will this cause issues down the line for the prospecting purchaser relying on a mortgage as he/she might struggle to get Title insurance for the same reason?

Any suggestions?

Thanks!

Hi All:

I have a tenant in  MD who claims to have COVID and is irresponsive to my emails/call, etc. This tenant has a history of paying late, but in fairness she always pays. Rightly or wrongly, I fell in this pattern of not insisting on charging late penalty due to COVID and that I am an out of state landlord. 

I have to chase her always to ensure rent is paid in the respective month. She now claims that she was diagnosed with COVID and in quarantine and cannot say when the rent will be deposited.  As I understand it, in MD, you can serve a notice when the rent is 5 days late and she is certainly late. I do not wish to be insensitive, but there is a substantial monthly rent in question, and I am not entirely comfortable with her tardy and somewhat evasive responses. Her being in quarantine does not stop an online transfer. 

Should I pro-actively serve her with the notice which will either prompt a payment or it might turn into a  full fledge adversarial position. Any advice?