All Forum Posts by: Michael Morrongiello

All Good Points and well taken... Yes wholesale fees paid out or POC- paid outside closing 
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 ?

Ken
Few Attorneys will be willing to take on a Title Company and their army of litigators.

PLUS its clear that the owners Title Insurance policy purchased ONLY by our friend insured was was conveyed and purchased (albeit fraudulently); AND that was only the Land Lot. 
The insurance willingly PAID on that claim. 

Trying to think outside the box here 

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 

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 

Chris
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.." 

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 

Denise- Thanks for your insights; we are VERY familiar with many of the nuances you shared between a Mortgage Security Instrument and a Deed of Trust security instrument.
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

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.....

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 as 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.....

Question;

If we purchase a DOT - Deed of Trust & Note on a RESIDENTIAL property in Alabama where the Borrower is or was an ENTITY (an LLC) and the property is being used for RENTAL INVESTMENT PURPOSES (not as owner occupants); If it goes to FORECLOSURE and we repossess the property; Does the prior owner (the LLC Entity) still have a RIGHT OF REDEMPTION Period of time AFTER the we've completed the foreclosure and repossessed the property?