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All Forum Posts by: Marty Boardman
Marty Boardman has started 5 posts and replied 291 times.
Post: Do you tell your pre-foreclosure sellers that you noticed they’re in pre-foreclosure?
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Mike Schorah:
I don’t want to offend them, but I find that asking them why they are thinking about selling gets me nowhere. They always evade the answer to that question.
First of all, confirm with the foreclosing attorney that the case is still active. You don't want to contact a homeowner that isn't in foreclosure anymore...you'll just make them angry.
Then say this...
"Hello, I stopped by today (if door knocking) to talk to you about the situation with your mortgage" and then STOP talking.
Don't use the word "foreclosure" or "auction".
If calling say "Hello, I was calling to talk to you about the situation with your mortgage" and then STOP talking.
COMMON RESPONSES:
I've got it taken care of...
I'm working it out with the bank...
I'm selling to someone else...
When they tell you this say...
"That's great news! Just thought you should know I checked right before I reached out to you and the attorney still has your case listed as active. You may want to check back with them to see what's going on. They treat people like a number and may have dropped the ball with your case. I can help you with this and can get you cash at closing and extended time to find a new home. If anything changes here's my number."
As @Joe Homs said...just keep them talking :)
Post: Experience Purchasing from Select Portfolio Services?
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
SPS is paying the taxes because they don't want the county to foreclose on the property. If this happens the mortgage SPS has recorded gets wiped out. So they "protect" their interest by keeping taxes current.
As several have pointed out here, only the homeowner can sell you the property. If you do make contact with them (and you can make a deal) these back taxes would have to be paid to SPS, in addition to all past due payments, penalties and interest. If the owner is really behind 20 years then it's likely they're underwater on the mortgage too. You're better off focusing your time on properties/deals that have real equity (and an owner that's easier to find).
Good luck!
Post: Is there any deals to be made on pre foreclosure with no equity?
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Joey Chrisman:
Quote from @Marty Boardman:
Quote from @Joey Chrisman:
Quote from @Chad U.:
Quote from @Joey Chrisman:
I'm confused. Why would I want the note when the original mortgage balance that is owed is more than what I believe the property is worth. I don't want the property for the price the trustee paid. Or you're saying buy the note for a discount? I doubt the foreclosure process is that expensive in Arizona and they likely have already spent a decent amount on the process already.
Buy the note at a discount. However I've seen numerous defaulted fix and flip loans, and the lenders are holding out for par. They are still in disbelief, like many sellers are, that house prices have come down and not willing to budge much. AZ is non-judicial so the foreclosure cost is relatively quick and inexpensive
Finding below market deals in Arizona is definitely a challenge. I get wholesalers sending me properties here daily that don't pencil out and wonder who is buying these homes?
I like to target homeowners in foreclosure with less than 30 days until auction. At this point they're out of options and the big iBuyers can't help, nor can a Realtor. My last two deals (fix and flips) I acquired directly from the homeowner 24 hours prior to the auction.
Your best bet Joey is to source your own deals through marketing, networking, etc. Trying to make a deal with a HML buying paper, short sales, etc. is high-hanging fruit. Good luck!
Mostly high equity yes to fix and flip, but also sub-to deals with newer homes that don't need much work and have low interest rate loans. There are opportunities to hold these for cash flow with little cash out of pocket.
Post: Is there any deals to be made on pre foreclosure with no equity?
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Joey Chrisman:
Quote from @Chad U.:
Quote from @Joey Chrisman:
I'm confused. Why would I want the note when the original mortgage balance that is owed is more than what I believe the property is worth. I don't want the property for the price the trustee paid. Or you're saying buy the note for a discount? I doubt the foreclosure process is that expensive in Arizona and they likely have already spent a decent amount on the process already.
Buy the note at a discount. However I've seen numerous defaulted fix and flip loans, and the lenders are holding out for par. They are still in disbelief, like many sellers are, that house prices have come down and not willing to budge much. AZ is non-judicial so the foreclosure cost is relatively quick and inexpensive
Finding below market deals in Arizona is definitely a challenge. I get wholesalers sending me properties here daily that don't pencil out and wonder who is buying these homes?
I like to target homeowners in foreclosure with less than 30 days until auction. At this point they're out of options and the big iBuyers can't help, nor can a Realtor. My last two deals (fix and flips) I acquired directly from the homeowner 24 hours prior to the auction.
Your best bet Joey is to source your own deals through marketing, networking, etc. Trying to make a deal with a HML buying paper, short sales, etc. is high-hanging fruit. Good luck!
Post: Foreclosure and Subject to
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Kathie Russell:
Quote from @Marty Boardman:
Quote from @Kathie Russell:
Quote from @Marty Boardman:
Quote from @Jay Hinrichs:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marc Rice:
Quote from @Felix Contreras:
I have recently started to look at options with subject to and mainly focusing on foreclosure in the area of Greensboro. I am new to this method and have only ever used traditional finance that includes Va and conventional loans. If someone here has experience with subject to pros and cons and could provide some insight it would be highly appreciated. I would also like to see if anyone here has any recommendations on where to find the owners number. I have the county record with the name of the owner but no number. Currently I reside in Ohio and will be moving to NC, focusing on investing in the Greensboro area.
Pace Morby has some good content on subject to's. They can be a great way to get into the game with low money down.
The subject of concern is: "considering subject to on an active foreclosure."
I'm curious, do you know of an investor/s that have gone to jail for doing subject-to deals with homeowners in foreclosure? Most deeds of trust/mortgages have a "due-on sale clause" that states if title is transferred they can "call the note". But this doesn't trigger any sort of legal action against either party in the transaction. There is no "due-on sale jail". If the lender accelerates the new owner has to pay off the loan or lose the property. But if the payments are made on time it's hard to believe a bank would call a note that's performing.
As used in ORS 646A.702 to 646A.720: here is the law in Oregon and there is similar law in WA and Ca. further more if you buy a property and follow this law from someone in foreclosure. if you sell it within a few years you have to give the owner who sold it to you 80% of your gain.. therefor I stopped doing these years ago and only those that dont know the law's break them and try to go after foreclosures. it has Zero to do with the due on sale clause and of course every state is different. But you do have federal laws as well.. Of course this does not sell guru class's following the pesky laws would be a turn off
Felix's original question was regarding the pros/cons of doing pre-foreclosure subject-to deals in North Carolina. Not Washington or California or Oregon. There doesn't seem to be any state law in NC that prohibits an investor from contacting a homeowner in foreclosure about purchasing their home. Nor are subject-to deals outlawed. As a matter of fact, the local NCREIA is hosting an online class taught by a local investor and retired real estate attorney this Saturday on subject-to deals.
As Mike has pointed out, there are risks associated with subject-to deals. But in my opinion they are calculated risks that can be managed with the right disclosures, contracts and title insurance.
Subject to is not illegal in NC and if done right, fully protects all parties. The subject to workshop on zoom is actually not through NCREIA (though they are a part of it) but is through a national REIA Mastermind group. If anyone would like the link for the seminar (there is a small fee) just message me.
Subject to is not right for every property. But it is a very valuable tool to have in your toolbelt, for the right seller and the right situation. And it is a very good option to keep in mind in the upcoming economy, with higher interest rates and millions of loans out there at 3%. Any investor would be imprudent not to consider it as an option.
I didn't know you were on here Kathie or I would have mentioned you by name. Thanks for adding to the discussion and good luck with this weekend's training!
Thanks Marty! i am ok not being mentioned by name. I know they don't like self promotion on here.
From what I understand about BP forums you can't promote yourself, but others can. Before I made any more comments here I wanted to make sure that Felix got his questions answered specific to North Carolina. So I did some internet searching and discovered your class. Clearly you know what you're talking about, so glad to promote for you :)
Post: Foreclosure and Subject to
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Kathie Russell:
Quote from @Marty Boardman:
Quote from @Jay Hinrichs:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marc Rice:
Quote from @Felix Contreras:
I have recently started to look at options with subject to and mainly focusing on foreclosure in the area of Greensboro. I am new to this method and have only ever used traditional finance that includes Va and conventional loans. If someone here has experience with subject to pros and cons and could provide some insight it would be highly appreciated. I would also like to see if anyone here has any recommendations on where to find the owners number. I have the county record with the name of the owner but no number. Currently I reside in Ohio and will be moving to NC, focusing on investing in the Greensboro area.
Pace Morby has some good content on subject to's. They can be a great way to get into the game with low money down.
The subject of concern is: "considering subject to on an active foreclosure."
I'm curious, do you know of an investor/s that have gone to jail for doing subject-to deals with homeowners in foreclosure? Most deeds of trust/mortgages have a "due-on sale clause" that states if title is transferred they can "call the note". But this doesn't trigger any sort of legal action against either party in the transaction. There is no "due-on sale jail". If the lender accelerates the new owner has to pay off the loan or lose the property. But if the payments are made on time it's hard to believe a bank would call a note that's performing.
As used in ORS 646A.702 to 646A.720: here is the law in Oregon and there is similar law in WA and Ca. further more if you buy a property and follow this law from someone in foreclosure. if you sell it within a few years you have to give the owner who sold it to you 80% of your gain.. therefor I stopped doing these years ago and only those that dont know the law's break them and try to go after foreclosures. it has Zero to do with the due on sale clause and of course every state is different. But you do have federal laws as well.. Of course this does not sell guru class's following the pesky laws would be a turn off
Felix's original question was regarding the pros/cons of doing pre-foreclosure subject-to deals in North Carolina. Not Washington or California or Oregon. There doesn't seem to be any state law in NC that prohibits an investor from contacting a homeowner in foreclosure about purchasing their home. Nor are subject-to deals outlawed. As a matter of fact, the local NCREIA is hosting an online class taught by a local investor and retired real estate attorney this Saturday on subject-to deals.
As Mike has pointed out, there are risks associated with subject-to deals. But in my opinion they are calculated risks that can be managed with the right disclosures, contracts and title insurance.
Subject to is not illegal in NC and if done right, fully protects all parties. The subject to workshop on zoom is actually not through NCREIA (though they are a part of it) but is through a national REIA Mastermind group. If anyone would like the link for the seminar (there is a small fee) just message me.
Subject to is not right for every property. But it is a very valuable tool to have in your toolbelt, for the right seller and the right situation. And it is a very good option to keep in mind in the upcoming economy, with higher interest rates and millions of loans out there at 3%. Any investor would be imprudent not to consider it as an option.
I didn't know you were on here Kathie or I would have mentioned you by name. Thanks for adding to the discussion and good luck with this weekend's training!
Post: Unsure of Foreclosure terms
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Which site are you referring to Rex? There are a lot of third-party companies that aggregate lists of pre-foreclosures. In my experience I've found these lists to be outdated and inaccurate. Your best bet is to get the information directly from the source, Hamilton County.
Tennessee is a non-judicial state, which means the foreclosure process is governed by state statute. You want to search at your county for the Notice of Trustee's sale, Substitute Trustee's Sale, or Substitute Trustee's Notice of Foreclosure sale. These documents typically contain the homeowner's name, address, auction date, lender name and foreclosing attorney's name.
Here's a link to find all Tennessee public notices online by county: https://www.tnpublicnotice.com...
Homeowners in foreclosure rarely list their homes for sale with a Realtor, so you find find many of them on your local multiple listing service.
Happy hunting Rex!
Post: Foreclosure and Subject to
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Jay Hinrichs:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marc Rice:
Quote from @Felix Contreras:
I have recently started to look at options with subject to and mainly focusing on foreclosure in the area of Greensboro. I am new to this method and have only ever used traditional finance that includes Va and conventional loans. If someone here has experience with subject to pros and cons and could provide some insight it would be highly appreciated. I would also like to see if anyone here has any recommendations on where to find the owners number. I have the county record with the name of the owner but no number. Currently I reside in Ohio and will be moving to NC, focusing on investing in the Greensboro area.
Pace Morby has some good content on subject to's. They can be a great way to get into the game with low money down.
The subject of concern is: "considering subject to on an active foreclosure."
I'm curious, do you know of an investor/s that have gone to jail for doing subject-to deals with homeowners in foreclosure? Most deeds of trust/mortgages have a "due-on sale clause" that states if title is transferred they can "call the note". But this doesn't trigger any sort of legal action against either party in the transaction. There is no "due-on sale jail". If the lender accelerates the new owner has to pay off the loan or lose the property. But if the payments are made on time it's hard to believe a bank would call a note that's performing.
As used in ORS 646A.702 to 646A.720: here is the law in Oregon and there is similar law in WA and Ca. further more if you buy a property and follow this law from someone in foreclosure. if you sell it within a few years you have to give the owner who sold it to you 80% of your gain.. therefor I stopped doing these years ago and only those that dont know the law's break them and try to go after foreclosures. it has Zero to do with the due on sale clause and of course every state is different. But you do have federal laws as well.. Of course this does not sell guru class's following the pesky laws would be a turn off
Felix's original question was regarding the pros/cons of doing pre-foreclosure subject-to deals in North Carolina. Not Washington or California or Oregon. There doesn't seem to be any state law in NC that prohibits an investor from contacting a homeowner in foreclosure about purchasing their home. Nor are subject-to deals outlawed. As a matter of fact, the local NCREIA is hosting an online class taught by a local investor and retired real estate attorney this Saturday on subject-to deals.
As Mike has pointed out, there are risks associated with subject-to deals. But in my opinion they are calculated risks that can be managed with the right disclosures, contracts and title insurance.
Post: Foreclosure and Subject to
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Account Closed:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marc Rice:
Quote from @Felix Contreras:
I have recently started to look at options with subject to and mainly focusing on foreclosure in the area of Greensboro. I am new to this method and have only ever used traditional finance that includes Va and conventional loans. If someone here has experience with subject to pros and cons and could provide some insight it would be highly appreciated. I would also like to see if anyone here has any recommendations on where to find the owners number. I have the county record with the name of the owner but no number. Currently I reside in Ohio and will be moving to NC, focusing on investing in the Greensboro area.
Pace Morby has some good content on subject to's. They can be a great way to get into the game with low money down.
The subject of concern is: "considering subject to on an active foreclosure."
Ah, if only life was so easy. Banks know about Subject To. They aren't uneducated.
1. Interest rates have been rising. The likelihood of a bank or several banks, looking over their portfolio for low interest loans no longer in the name of the original borrower has greatly increased. Why have a loan out at 3% when you can call it due and put the money back into the market at 7.7% ?
2. Suppose a mandate came down from a bank executive who is under pressure for performance to clean up the portfolio to a new level of standard ?
3. Suppose a loan changed hands "Subject To" and it went bad and there was a lawsuit that went all the way to the Court of Appeals and was all over the banking pages. Don't you think the head of that bank would demand that all "Subject To" loans of the bank be called so as to avoid embarrassment with the Board of Directors?
4. Suppose someone did a Subject To on a Reverse mortgage and when the bank President found out, he choked on his cigar, dropped his cognac and blew his stack and demanded that his underlings "fix this problem: of "being subject to" fraud or whatever they call it."
He doesn't care what it's called, he just knows he has lost control of that and any other loan that he believes was fraudulently transferred.
5. When black swans occur, banks do things you’d never expect.
6. This isn’t about you and me, it’s about the bank’s impression and the pressures that they have put upon them.
Will banks call due perfectly performing loans that are what we call “Subject To” ?
Of course, if it’s in their perceived best interest. That varies from day to day depending on interest rates, new regulations, new boss, and a whole lot of things we never see because they are internal to the bank.
I used to live in earthquake land. Did I ever believe there would never be another unexpected earthquake? Of course not.
As real estate investors we take all sorts of calculated risks, it's part of the business. Anyone that is uncomfortable with this should just dump all their money into an S&P Index fund. You can "suppose" a lot of other terrible outcomes too, like a housing market crash, the federal government raiding depositor accounts to prop up failing banks, or aliens invading.
Using my own capital and credit to purchase a property is far more risky, in my opinion, than using someone else's, which is why acquiring properties subject-to (when done correctly) is a smart strategy. I'll take my chances that any of the 6 things you listed occur. If they do there are two solutions...1) sell the property and pay off the loan or 2) refinance the loan out of the original owner's name.
The subject-to transaction has been a popular investment strategy for over 40 years. Banks know they occur but do nothing to stop them. This isn't the first time in history rates have spiked. In 1981 rates peaked at 16% and the banks still weren't calling performing notes that originated in the 70s at 7-11%.
Post: Foreclosure and Subject to
- Real Estate Investor and Instructor
- Gilbert, AZ
- Posts 303
- Votes 330
Quote from @Account Closed:
Quote from @Marty Boardman:
Quote from @Account Closed:
Quote from @Marc Rice:
Quote from @Felix Contreras:
I have recently started to look at options with subject to and mainly focusing on foreclosure in the area of Greensboro. I am new to this method and have only ever used traditional finance that includes Va and conventional loans. If someone here has experience with subject to pros and cons and could provide some insight it would be highly appreciated. I would also like to see if anyone here has any recommendations on where to find the owners number. I have the county record with the name of the owner but no number. Currently I reside in Ohio and will be moving to NC, focusing on investing in the Greensboro area.
Pace Morby has some good content on subject to's. They can be a great way to get into the game with low money down.
The subject of concern is: "considering subject to on an active foreclosure."
I'm curious, do you know of an investor/s that have gone to jail for doing subject-to deals with homeowners in foreclosure? Most deeds of trust/mortgages have a "due-on sale clause" that states if title is transferred they can "call the note". But this doesn't trigger any sort of legal action against either party in the transaction. There is no "due-on sale jail". If the lender accelerates the new owner has to pay off the loan or lose the property. But if the payments are made on time it's hard to believe a bank would call a note that's performing.
The subject of concern is: "considering subject to on an active foreclosure."
@Marty Boardman: Hi Marty, it has nothing to do with the Due on Sale Clause. Subject To is still legal when done legally. The problem is in preforeclosures & "vulnerable persons" and S.A.F.E. Act and Consumer Protection Act.
Someone on Bigger Pockets recently posted & boasted that they "helped" an elderly widow with serious health problems by buying her house appraised at $290,000 for $60,000 and was "helping" her. In Washington, Oregon, California, Florida and a dozen other places, that would be elder abuse and in my opinion, rightfully so. Elder abuse In Florida, I think, is a 3 year jail term for that kind of offense.
In Washington in particular, where I bought properties in preforeclosure for decades, the law was changed so that you can't even solicit preforeclosures without violating the law. The fine is treble damages and the time limit on the offense is "sometime in the future" meaning, if a seller comes back in 10 years and claims they were on the verge of preforeclosure (no proof needed, they just had to "believe" they might start missing payments), you pay the difference times 3, between what you bought it for and what the "today's" value is. Seems a bit extreme. ;-) But, that's what it is. There have been additional changes but I haven't kept up since abandoning Washington a few years back.
The caution is to know the laws of the area that you solicit and buy preforeclosures in.
Also, Here's a post I did on Subject To that may help
https://www.atg.wa.gov/news/ne...
It's classified as "Equity Skimming"
https://app.leg.wa.gov/RCW/def...
RCW 61.34.030
Criminal penalty.
Any person who wilfully engages in a pattern of equity skimming is guilty of a class B felony under RCW 9A.20.021. Equity skimming shall be classified as a level II offense under chapter 9.94A RCW, and each act of equity skimming found beyond a reasonable doubt or admitted by the defendant upon a plea of guilty to be included in the pattern of equity skimming, shall be a separate current offense for the purpose of determining the sentence range for each current offense pursuant to RCW 9.94A.589(1)(a).
I understand that foreclosure "rescue" services are illegal in several states, as-is equity skimming and elderly abuse. Regardless if an investor/buyer were doing a subject-to deal with the homeowner in foreclosure, or paying cash for their house (paying off their loan), state/federal laws may be violated.
Perhaps I misunderstood, but it seems like you were implying that doing foreclosure deals subject-to could put you in jail when really it's something else in the transaction that causes legal trouble for the investor/buyer.
I've read your post on the subject-to topic before. I've done over 300 subject-to deals and none of the things you listed have been an issue for me. Perhaps I've just been lucky, but in my experience if structured correctly there's minimal risk with a subject-to transaction to the buyer (and each of the items you point out can be mitigated with the proper documentation and title insurance).
The key to staying out of trouble is fairly simple with a subject-to...keep making the monthly payment. If the underlying loan stays current the former owner isn't going to complain, they're getting a payment made on their behalf every month. And there's no way the lender is going to accelerate a performing loan.