All Forum Posts by: Rodney D.

I've been flipping for 15 years in Va and here's what I do:

IF you plan to flip a foreclosure in a Judicial state (Maryland is one) which requires post-sale review from the courts then NO, you don't need title insurance.  The court review process acts to "Quiet Title" and effectively scrubs the title clean.  Its not 100% but close.

IF you plan to flip (holding < 1 year for possession & renovation) in a non-Judicial state, then it DEPENDS.

It is always much SAFER to buy title insurance, so you won't go wrong doing it, but I am assuming you want to save a few $1000s by not getting it.  So my take is.

If there is lots of activity on the current title before the sale (ie. quit claim deeds, note transfers, name changes, people being added onto or falling off the deed) then YES, get it.

If however, the title search reveals a clean clear cut chain, then NO, it's very IMPROBABLE that someone is going to come knocking on your door during the 3-6-9 months you own it.

My 2 cents...

Rodney

Hi all,

This is actually a 2 part question for fellow foreclosure investors:

1. Mortgage Payoff

Has anyone found a way (or pay-service) to obtain a CURRENT mortgage payoff for mortgage/note WITHOUT owners authorization?   (note: this is NOT the recorded trust/note - I've got that already from title search)

Why?  I'm seeing a lot of second notes being foreclosed subject to payoff of the 1st.  Problem is, many note payoffs are actually HIGHER than the original amount recorded in the clerks office.

so this leads to question #2...

2. Any ideas on how a mortgage/note ends up 50% HIGHER than the county recorded amount?  (refi's are recorded as new notes and satisfy the original note so they don't count in this scenario)

Why?  Many investors here in Northern Virginia, are purchasing 2nd position notes/trusts via foreclosure subject to payoff of the 1st.  Problem?  When going to settlement the note, lets say a $300,000 trust recorded in 2004, has now become $600,000!!  Yes, let me repeat, that is not a typo, its over 50% MORE than the original recorded amount.  

This has left many investors scared to purchase 2nd position foreclosures.  When doing our due diligence before the sale, we call up the 1st position(trust) noteholder (located via MERS) and ask them for payoff.  They state that information is private and can only be released with a signed authorization from the homeowner.

In reply, I say to the noteholder, "great idea, let me call up the homeowner who is facing foreclosure, and who is hostile as hell, ask them for their payoff amount on their 1st mortgage, or, authorization to contact their bank to find out." <click>   The noteholder of course says, "sorry sir, we cannot release that information without authorization."

ANYONE else encounter these 2 problems??

Rodney

15 year investor

I too have found it nearly impossible to get payoff figures from banks on superior notes.

Did you ever find a solution to this?