All Forum Posts by: Tim Silvers

Quote from @Peter Walther:

Quote from @Tim Silvers:

Quote from @Peter Walther:

Unless the 1st lien holder was named in the QT action it had no business spending money appearing in the litigation.  I suspect you are not the Borrower and unfortunately, I believe only the Borrower can successfully object to the charges being added to the loan balance.

I am the borrower and have already called BOA and made it clear they were not named in the complaint. They then sent a letter (posted in the link in my above post). Attorney is writing a letter to reiterate my objection, but feel BOA will rely on the DOT language.

 I'd be thinking about bringing a declaratory judgment action against BOA asking the court to declare it impermissible for BOA to add the expense to the loan principal.  Since the loan docs provide for the lender to get atty fees if it's successful in court, reciprocity says you should get yours if successful.

That's probably how we would proceed if BOA fails to rescind the charges, but it's a gamble and would cost me the same in legal fees (not including litigation) to sue them with no guarantee of a successful outcome. So, worst case, I wind up not only owing the $2K to BOA but another 2K+ in additional legal fees to my counsel.

Quote from @Jonathan R McLaughlin:

@Tim Silvers 2k would be consistent with the cost due diligence in connection with the second mortgage and it’s implications

There was no reason for them to hire attorneys for due diligence since they were never named in the complaint to begin with so there were no implications to them. But I understand what you're saying and I fear they will just default to relying on the boiler plate blanket language in the DOT. The cost to bring a complaint against them would exceed the cost of their legal fees and they know that. It's a scam.

Quote from @Peter Walther:

Unless the 1st lien holder was named in the QT action it had no business spending money appearing in the litigation.  I suspect you are not the Borrower and unfortunately, I believe only the Borrower can successfully object to the charges being added to the loan balance.

I am the borrower and have already called BOA and made it clear they were not named in the complaint. They then sent a letter (posted in the link in my above post). Attorney is writing a letter to reiterate my objection, but feel BOA will rely on the DOT language.

Replies in CAPS:

Quote from @Chris Seveney:

@Tim Silvers

Wow this is interesting and have never seen this. Several questions ring in my head (putting my note investing thinking cap on).

1. Are you the owner? YES

2. Was there title insurance on the property ? YES

3. When was the 1st originated and the 2nd originated? AT SAME TIME - BOTH LOANS WERE ORIGINALLY WITH COUNTRYWIDE WHICH FAILED AND THE LOANS WERE THEN SOLD OFF TO SEPARATE LENDERS.

4. Has the 1st ever been defaulted upon NEVER

5. Was the 2nd ever in default? YES, WHICH IS HOW WE WERE ABLE TO GET THE 2ND EXTINGUISHED (PAST THE 10-YEAR STATUTE)

A lot of unknowns but if it’s your loan request a qualified written response. ALREADY DID. LETTER FROM BOA IS IN THE LINK I POSTED ABOVE.

I can see your frustrations but if the 1st had to get legal counsel to protect its interest including responding to a quiet title then more than likely they have a claim to charge the fees. CORRECT, HOWEVER, AGAIN, THE 1ST LENDER WAS NOT NAMED IN THE COMPLAINT.

So I retained counsel to file a quiet title complaint to remove a defaulted and charged off 2nd mortgage HELOC that under state (NV) statutes was no longer enforceable (past the 10-year SOL from the date of acceleration).

The good news: we prevailed and the lien is now extinguished.

The 1st mortgage remains remains current.

The bad news (letter HERE): The 2nd lienholder we sued was MERS who took over from the original lender some years back.

The 1st mortgage is with Bank of America (BOA) and is an entirely unrelated loan. Somehow, BOA "retained legal counsel in an effort to protect the interest held in the property" and assessed over $2000 in legal fees to the 1st mortgage loan balance "per the terms outlined in your deed of trust that are considered recoverable from the borrower." This was subsequent to reaching out to BOA, making it explicitly clear to them that they made an error in that the litigation was against a mortgage that is completely separate and does not in any way affect the 1st mortgage.

My attorney is completely baffled as to how this could have happened and has no idea how to resolve since he feels BOA will rely on the language in the Deed of Trust.

Side note: Upon looking at the Deed of Trust for the first mortgage, MERS is listed as "the beneficiary under this Security Instrument".

It almost seems like MERS merged the loans under one case and charged back their legal defense fees to the remaining BOA mortgage so it cost them nothing even though there was no case directly brought against their BOA loan - only their 2nd. They did this in error and are making the borrower pay for their mistake.

Has anyone experienced this in a quiet title action against a loan on a property in which there is more than one lender?

Would appreciate any and all input.

Does anyone know if mobile homes on leased land (no parcel) and seller-financed would be eligible for installment method reporting since they are (i) personal not real property, (ii) the notes cannot be considered as cash equivalent and are generally not marketable (no established secondary market), (iii) have a high rate of default/repossession and thus may effectively crumble one of the pillars of revenue recognition?
Example: buy-here-pay-here car lots as mentioned in post from a CPA in this thread.

Here is a tax court case involving mobile homes (with parceled land) in which the sellers used the installment method: Tax Court Decides Reporting Methods for Mobile Home, Land Sales

The outcome does not seem to be a slam-dunk to me, but maybe I'm just interpreting it wrong.

Does anyone know if mobile homes on leased land (no parcel) and seller-financed would be eligible for installment method reporting since they are (i) personal not real property, (ii) the notes cannot be considered as cash equivalent and are generally not marketable (no established secondary market), (iii) have a high rate of default/repossession and thus may effectively crumble one of the pillars of revenue recognition? 
Example: buy-here-pay-here car lots as mentioned in post from a CPA in this thread.

Here is a tax court case involving mobile homes (with parceled land) in which the sellers used the installment method: Tax Court Decides Reporting Methods for Mobile Home, Land Sales

The outcome does not seem to be a slam-dunk to me, but maybe I'm just interpreting it wrong.

There is no absolute, black-and-white answer and each case in unique and must be handled on a case-by-case basis, but my thinking in these areas of grey is to err on the side of caution (at the end of the day, whatever tax liability assessed has to be paid sooner or later anyway). And If the buyer/borrower defaults on the note and I repossess, that is a new taxable event - and there may be a gain or loss on repossession, correct?

Quote from @Scott Mac:

I'm not an asbestos expert, but  I ttelieve encapsulation is a legal remediation method.

If so what is Buyers problem; insurane not paying for damage orr raising rates?

As a wholesaler on this transaction, I am trying to support my buyer's contention that the seller did not adequately disclose all the issues with respect to the condition of the property which include possible reliance upon an inadequate asbestos report, issues with tenants refusing to vacate, etc. but at the same time know that he executed an as-is contract. In addition, the buyer had met and had conversations with the seller directly whereas all I did was assign the contract. He is further asserting that whatever settlement he receives from insurance will not bar or affect his ability to pursue possible legal remedy against the seller. His choice, which may change over time. If it were me, I would want to see how much the insurance would cover first and assess from there, but I'm not the buyer. Worst case, there's also the option, depending on the price, to resell the property to another buyer or even back to the seller. If my buyer can unwind the deal and just get his money back without any profit, he would do it in a heartbeat. 

Quote from @Haris Becaj:

Hey Tim, 

I also vote option #2 and agree with @Tim Silvers. As a local lender, our company has seen almost a dead-stop in mortgage applications with the rising rates, and they are projected to continue to increase. This will look even worse in the very near future. 

I live in the foothills of Henderson, by Lake Las Vegas, and befriended a GC who's been building homes for his investor in my area in the recent years. He stands-up these identical 3000sf, stick-built homes in 6 months or less. I think your estimation of 12-15 months is very conservative. He uses a local company http://ultryxdesigngroup.com/ as the designer and they pull all permits and deal with the city. This might be something worth looking into. 

Hope that helps. 

Can I ask whereabouts your property is located?

Thanks,

Haris 

The lot is located in a subdivision off W. Sahara and Arville. SFR build dates range in the low to mid 60s. Prices have been steadily increasing over the last several months.

We wholesaled a small multi-family deal to one of our buyers. The property had a sewer line damage and an insurance claim that had since settled. Seller provided us with an asbestos report which showed that 6 samples were done and all samples tested negative. Buyer purchased as-is. Subsequent to closing escrow, one of the units caught fire and in the process of the fire investigation, it was discovered that there was in fact asbestos behind the drywall. I have since learned there are 2 layers of drywall and you have to test both layers. Apparently, the testing company did not test for both layers. In addition, i have learned that there should've been about 30 samples tested for as opposed to only 6. I'm concerned the asbestos testing company's defense may be that they only tested the units for the damage related to the sewer line backup and not a full inspection. Don't know if that makes any sense.

What recourse does my buyer have, if any, at this point, as he is obviously dissatisfied with the purchase and is blaming the seller for non-disclosure even though the seller claims the report they sent is the only report they are aware of.