All Forum Posts by: Michael Morrongiello
Michael Morrongiello has started 42 posts and replied 112 times.
Post: Existing 2nd lien Mortgage & Note sale concerns

- Specialist
- Napa, CA
- Posts 116
- Votes 30
Property is located in the Sunshine State - Florida
Post: Existing 2nd lien Mortgage & Note sale concerns

- Specialist
- Napa, CA
- Posts 116
- Votes 30
Situation:
Husband and wife bought a NEW home in 2017 for $380K and put down $90K, then obtaining a $290K CONVENTIONAL 30 Year Fixed interest rate 1st lien @ 4.0%. The payments on this 1st lien are $1,384.50 P & I only. The Husband is a realtor and wife works on occasion. This is their primary residence and the value increased quite a bit since 2017 to where conservative value of the home today is in the $625K to $650K value range. The real estate markets slowed in 2024 and the husband reached out to an investor associate to BORROW some funds during these slow times. The investor associate who KNEW them and had done past business with them agreed to LEND them $27K as a 2nd lien mortgage note against their home with I/O terms and a balloon due in 12 months. The closing was done thru an attorney. NO income qualifying was done between the parties as the knew one another and had done past business with one another.
PROBLEM;
When the 12 months maturity date came due in 2025 the borrowers COULD NOT pay off the $27K 2nd lien So the Investor lender agreed to FULLY AMORTIZE out the $27K over a 60 month (5 year) period of time with monthly installments. They have slowed paid some of these payments and then caught them up. The 2nd lien balance is now $24, 000 +/- and The 2nd lien Note holder wants to move on from this loan and not have to deal with them any longer. With its almost 8 yrs of payments paid on it thus far; The approximate superior 1st lien balance outstanding is $243,000
QUESTION:
Given that that this 2nd lien loan was closed thru an attorney and the parties knew one another, and it appears there is SUFFICIENT
equity cushion between what they owe on their 1st lien ($243K) and their 2nd lien ($24K) Vs the $625K to $650K Now Property Value.
WOULD YOU BUY THIS 2nd lien ?
Would you have any concerns that this might be construed as a consumer loan since its an owner occupied residence and was so when the investor LOANED them the 2nd lien funds?
Would then cause you to pass on the purchase even at a DECENT discount of THIS 2nd lien Mortgage & Note?
Thoughts?
Michael M.
Post: Not COVERED - TITLE Insurance issue- THOUGHTS appreciated to remedy

- Specialist
- Napa, CA
- Posts 116
- Votes 30
are typically NOT part of the property purchase price and Owners Title Insurance Policy being issued to the property buyer /insured. Not sure IF all title insurers will issue a policy in EXCESS of the purchase price to cover the extra padding (wholesale fee)
I was looking for a way (out of the box thoughts)
to possibly FORCE this original Lot owners hand to
SELL the lot back to our friend or thwart him from selling the lot to anyone else.
Some thoughts;
Acquiring any future past due HOA Dues from the HOA
(then bringing action to foreclose on them)?
Filing a Lis Pendens to cloud title (Lawyer Latin for "Suit pending") of the lot ?
OR could some other way a lien could be placed against the lot property
That could bring the now rightful owner (who took back title) back to the negotiating table ?
Post: Not COVERED - TITLE Insurance issue- THOUGHTS appreciated to remedy

- Specialist
- Napa, CA
- Posts 116
- Votes 30
Ken
Few Attorneys will be willing to take on a Title Company and their army of litigators.
The insurance willingly PAID on that claim.
Trying to think outside the box here
Post: Not COVERED - TITLE Insurance issue- THOUGHTS appreciated to remedy

- Specialist
- Napa, CA
- Posts 116
- Votes 30
A friend bought a land lot in an area where this is a HOA - Home Owners Association for $100K from a land Flipper and DID obtained an OWNERS TITLE insurance policy. The HOA Dues were in arrears for the lot as they were not being paid.
He then started construction on a new home on the lot and has invested about $200K+ into the lot in the way of improvements.
He received a call and correspondence from an individual who RIGHTFULLY claimed they had their title to the SAME land lot stolen from them by the land Flipper (who apparently fraudulently forged signatures transferring the land to them) and THEN SOLD it our friend.
Our friend file a claim with the TITLE Insurer who provided the OWNERS TITLE INSURANCE Policy to them for the $100K
purchase of the land lot. The Title Insurer has agreed to PAY HIM back the $100K that was for the purchase of the land lot BUT
they WILL NOT pay anything more (ignoring the improvements made to the lot). TAKE NOTE HERE !!! - ALL the Title Insurer will pay back to our friend is their purchase price for the Lot.
The RIGHTFUL owner (who will get back his lot- now IMPROVED and valued > $300K+) is also now unwilling to sell the lot to him.
Thus He will LOSE this land lot and also now the $200K of additional improvements made to the land lot.
Any suggestions or courses of action or recourse that our friend might or could take to somehow RE-Obtain the land lot (now improved) ???
Eg. Can he possibly pay some of the HOA Dues and then bring an action against the ACTUAL legal owner of the lot in an attempt to FORCE them to SELL the lot to them?
Other thoughts....
Michael Morrongiello - Sunvest
Post: New investor from California, eager to learn and get moving

- Specialist
- Napa, CA
- Posts 116
- Votes 30
Jack - I strongly urge you to attend some of the respected REIA - Real Estate Investor Associations in your area. NOTE all Meetups are educationally driven, many of them are attempting to sell you something? (a course, book, system, or entice you to invest, etc.)
Best to LEARN from those in the Trenches doing deals and who have ups and downs experiences. A good group in the SF Bay area that has been around for a LONG TIME 25+ years holding monthly meetings and that provides high level education, discussion and networking opportunities for both beginning and seasoned RE investors is BAWB - check them out if you can Bay Area Wealth Builders Association
Post: Are Deeds of Trust used and insurable in the State of Alabama?

- Specialist
- Napa, CA
- Posts 116
- Votes 30
That is EXACTLY what is taking place. New Corrective documents (Mortgage Vs Deed of Trust) and a Corrective Promissory Note will be executed to CORRECT and REMEDY the flawed documents used.
Moral of the story; many folks use online forms, or store bought documents which they often do not fully understand to save some $$ Moolah - only to create BIG Problems for themselves and others.
Old Saying; "Don't be Penny Wise and POUND Foolish.."
Post: Are Deeds of Trust used and insurable in the State of Alabama?

- Specialist
- Napa, CA
- Posts 116
- Votes 30
Agreed; While both are used; the more customary security instrument used is a Mortgage Vs a Deed of Trust to secured a promissory Note. Good Advice indeed - Thanks
Post: Help with Redemption of Rental Property in Alabama

- Specialist
- Napa, CA
- Posts 116
- Votes 30
The Title insurer we are seeking a Mortgagee / Loan Title insurance policy from is stating the
Deeds of Trust are not allowed in Alabama and / or typically used and their Title Underwriter is REFUSING to insure the loan (or the issuance of a Loan Title Insurance policy)
I find that ODD and in conflict with what the AI Post stated and I am almost certain we have bought DOT- Deeds of Trust in the past in Alabama
Post: Are Deeds of Trust used and insurable in the State of Alabama?

- Specialist
- Napa, CA
- Posts 116
- Votes 30
We've been offered the opportunity to purchase a Seller Financed -Purchase money 1st lien DOT - Deed of Trust securing a promissory Note involving a property in the State of Alabama. We will fund this internally for our fund and take an assignment of the security instrument and endorsement of the promissory Note. There NEVER was a LOAN Title insurance policy issued.
TWO (2) Title companies we've approached have told us that Deeds of Trust are NOT used in the State of Alabama and the commonly used security instrument used to secure "A Promise" promissory Note involving real estate is a MORTGAGE security instrument. They are RELUCTANT to issue a loan title insurance policy insuring the DOT - Deed of Trust and have stated that we may have COLLECT ABILITY issues IF the Note goes BAD in the future and we have enforce our rights as a creditor against the Debtor to collect.
A quick check online using AI - says that "Yes, Alabama is considered both a mortgage and a deed of trust state. This means that when securing a loan with real estate, Alabama allows the use of either a mortgage or a deed of trust, unlike some states that exclusively use one or the other. "
Q- Does anyone have REAL EXPERIENCE with this issue?
Have you used a DOT -Deed of Trust to secure a Promissory note or were
you able to obtain a Lender Title insurance policy insuring the DOT and its assignment to you?
Puzzled for sure.....