All Forum Posts by: Joe Henry

The original note was for 220k, since the borrowers (previous owners) never paid, it's already at 500k because of interest and fees. But now i am the only one on the title. I'm just thinking it's better for the bank because I might have to move out due to financial reasons, and then the property will be sitting here vacant, leaking and with a developing mold problem that will go from just one wall to the entire house if not taken care of. But I don't know how to pitch this to the bank.

@Kevin Sobilo, in Florida an HOA can foreclose without clearing the first mortgage. I have an excellent lawyer who has looked into every detail of the foreclosure. At this point I just need the repairs done.

Here's a longer form post about my situation, but i'll summarize it below (https://www.biggerpockets.com/forums/41/topics/1163859-hoa-f...)

> Military husband/wife buy new home, divorce, stop paying note and hoa
> Husband is erroneously removed from title by tax appraiser, HOA forecloses on wife, I buy home at auction
> Now I am on title, wife and husband on note, bank cannot foreclose because husband is protected by SCRA 
> (more on this in the above post, but husband does not want the house back)

A while after moving in I discovered water damage inside a wall where rain has been getting in due to needing a new roof. I don't have funds for the roof, or to replace the outside supporting wall frame and stucco.

However the bank has changed the locks on me multiple times to "protect their asset", which got me wondering, would they also put a new roof on it and repair the rot to protect their asset? Haha it might be a reach but I don't have many options at the moment. The roof is from 2008, and I assume the bank is carrying insurance on the property. I'm surprised the insurance hasn't required a new roof yet.

What are my opitons here? I can get in touch with the lender and ask them, or should I try to go to their insurance provider? 

I'm a fish out of water in this situation (this is my home, I don't do RE for income), so any possible approach to the situation is appreciated!

@Ron S., @Chris Seveney

Thank you both for your replies, here's an update. My lawyer did a deep dive and discovered that it appears the county tax appraiser erroneously removed the husband from the title one year when updating the parcel tax record, probably incorrectly reading the divorce agreement and not actually looking up to see if a quit claim had been signed. After that the HOA was able to foreclose because no military personnel were listed on title. The bank cannot foreclose because the military husband is still on the note and still in the military.

I contacted the husband with this news and he had no interest in getting the property back. As of now I am the owner and live in the property, the note from the previous owners is still open.

Well I've got myself into a pickle. It's been a long time since posting here, I hope everybody is well! This is a tough one, I've spoken to lots of investors but this is outside the normal realm of knowledge for most - but I doubt that's the case for bigger pockets members!

Last July I purchased a home from HOA foreclosure auction. It was previously owned by a husband and wife, the husband being active duty military since mid 2000s. It did have a first mortgage of theirs open on it, which they have not made payments on since ~2014, just 6 years after the house was built. A lis pendens from the bank was filed 10 years ago, but the foreclosure was put on hold because of the SCRA restrictions protecting an active duty service member from being foreclosed on. The state is Florida.

I did not consider this first mortgage an issue because I was simply going to live rent and mortgage free in this property myself, rent bedrooms, make good money and recoup my investment in short time (netting 4k income per month if you count not having to pay my current rent). The couple had dragged out the HOA foreclosure for 3 years, and by the time the husband gets out of the military, is served bank foreclosure documents, and the bank foreclosure is finalized, my lawyer said it could be anywhere from probably 3 - 10+ years given all the information.

The catch now is the HOA foreclosure - how was the HOA able to foreclose (beginning 3 years ago) when the husband is active duty? I have been notified that currently the bank is looking into this exact question. But there's more to the story.

What I've gathered from speaking with the previous owners realtors, is that the husband and wife went through a divorce proceeding back around 2014, the husband agreeing to quit claim the property to the wife, in return for her within 1 year refinancing him off the loan.

In a brief conversation with the husband, he seemed to confirm that the quit claim was signed, but by her, because he had given her POA on the house (for which there is public record filed regarding the POA). However, my title search and the cases regarding the divorce and both foreclosures do not contain a quit claim filing at the county clerks office. The bank has also confirmed that he is still on the mortgage, so the wife never refinanced him off.

Stranger still, the HOA foreclosure did not list the husband on the case, only the wife "et al". The bank is informing me that if the HOA foreclosure was done solely against the wife, then the husband is still on the title, and my ownership is subordinate to his. Ouch.

I have my attorney looking into all this, and the ramifications of everything. But bigger pockets I know has combined experience that is not to be topped. 

Some questions:

- What are the ramifications if a quit claim was signed before the HOA foreclosure began, but never filed? Could the wife file it now and have it be valid from the date of signing?
- Is it possible for the HOA to foreclose just on one of the two owners or is this reason to contest the HOA foreclosure? Or was the husband included in the "et al" because he gave the wife power of attorney?
- If the husband still had rights to the home, has the HOA violated SCRA protections by conducting the foreclosure, or did the family need to object for the foreclosure to be halted?
- I've been looking into resale options, however without being in contact with the preivous owners (they are not open to contact) my options are limited. One investor said sometimes you can "pay to sign" and make decisions on someone else's loan, is this really an option? One said I can go direct to the underwriter to get a deal from them regarding the mortgage, since the servicer will not negotiate the payoff (150k+ interest and fees alone) and I don't have the note holders consent to do a proper Subject To deal. I'm unfamiliar with these tactics, it would be helpful to know if there's any avenue there or otherwise any options I'm not aware of.

I know the bank and my lawyer will have their own answers to these questions, but I'm looking for ideas in general. Because of my personal schedule I don't have as much time to fix up the property anymore, so I'm looking for an exit probably as the most preferable outcome. Still, if there's no exit but I can live in the property that would be acceptable too. But if I live there and rent bedrooms, I also don't want the husband to come knocking some time in the future saying "hey, you owe me part of this back rent as I'm a priority owner". 

I'm open to hearing any and all ideas and options that come to mind. Thank you all!

Hey Carl, very interesting stuff. I haven't had luck other than a few personal websites of people who have tracked this stuff themselves for their particular towns, but nothing even for Jacksonville, where I'm looking. But maybe that means there is someone in your area who has the data. If you go to your local RE Investor Association, maybe some older experienced people who have been investing since the 70s or 80s have that data?

Please let me know if you find anything. I'll do the same.

To follow up with the suggestions made here I've uploaded a new version: https://www.biggerpockets.com/files/user/JoeH29/fi...

1. Added instructions page
2. Added monthly cap ex row
3. Added explanations to some of the rows in Deal Evaluation  
4. Added Permits and Inspection costs to the up-front cap ex calculations 

@Immanuel Sibero,

- First point. Thank you for bringing this up. Yes, I am missing a place in monthly expenses for cap ex. There are two types of cap ex expenses - the ones going into the project up front (e.g. the house needs a new roof immediately) and the ones you need to save for monthly, (e.g. in 5 years it will need a new water heater). So the cap ex I have listed is for the up front cost, costs you know you'll have just by purchasing the property. Thus, they are added to the all-in figure and CoC. You can either factor monthly cap ex into the monthly repair row, or add a row for saving monthly income for future cap ex. I think I will update the sheet to have it's own monthly cap ex row.

- Second point. Yes it's very detailed haha. I am new to RE as well, so I wanted to make a sheet that would help prevent me from overlooking things, thus the amount of detail. You can just add a number in the column next to each cap ex section heading (e.g. B13 for demo), instead of filling out all the items in each section. That way you can do ball-park estimates for each cap ex category.

@Christian Costa, thanks! I think I need to add some instructions maybe about how the three pages in the workbook interact, and do please let me know if there's anything else you notice.

One thing I remembered is not included is cost of construction inspections and permits in the Cap Ex sheet. Don't forget those if you need them ;)

@Joe Splitrock, thanks for the advice.