All Forum Posts by: Mitch Freed

Corey, so are you working with the servicer to get a list of all the properties they currently have that are in default? Or are you talking REO? The properties in default you still have to work the with homeowner or are you making offers to purchase the notes at a discount?

The borrower hasn't been paying their mortgage for months at this point. And I have had borrowers go along with that plan...I have actually had them tell me that they don't care what I do with their house...they are moving away and they don't want to give one more thought to their failed investment. Furthermore, at this point the mortgage is beyond payable...it is high in arrears and foreclosure is probably 3 months away...

That is correct about giving you a quit claim deed but that is only after the redemption period is over and the taxpayer not only doesnt redeem but also doesn't file a lawsuit challenging the legality of the sale.

The IRS probably doesn't care what happens after the sale just as long as they get their money...I assume all they are interested in is recovering their losses and what happens to the investor after the sale isn't their problem..therefore they aren't hopping up and down to answer questions on the matter

I also have read that this is a VERY confusing part of the law...and could potentially be very costly for the investor to protect their interest...because all they really get during the redemption period is a certificate of sale...the taxpayer is still the owner of record and could sell the property. Now, you can record the certificate of sale but that would only inform anybody pulling title that there is a possible break in the chain of title.

Also, once the sale is over and there is a successful bidder, the IRS lien is released and will not show up on title anymore...

Knowing all this...i'm not so sure this is a profitable investment...too much legal hassle...Also I think a bankruptcy may discharge your certificate of sale.

I really don't think you can get around a due on sale clause by sending a letter...but its really not something you need to get around as long as you are making the payments on time.

I would be interested to find out that if you buy a property sub 2 and then sell it the next day sub 2...what happens if the person you sold it to stopped making the payments 6 months down the road and foreclosure proceedings started...would the original borrower have any sort of claim against you since they sold you the property originally and you agreed to make the payments on time? Or are they SOL because you are out of the picture entirely?

Anybody have any experience with an IRS Public Auction where the IRS is auctioning off the right, title and interest of the Taxpayer in and to the property?

This particular sale has a 180 day redemption period I cannot get a straight answer from the IRS about the taxpayers access and posession right to the property after the sale. If I am the successful bidder, can I evict the taxpayer or the taxpayers tenant (if the property is rented) ??

Also, what happens if the taxpayer files bankruptcy during the redemption period?

I do know that if the property is redeemed by the taxpayer then they have to pay the successful bidder the full amount of the bid plus 20 percent annually from the date of payment.

Anybody have any experience with an IRS Public Auction where the IRS is auctioning off the right, title and interest of the Taxpayer in and to the property?

This particular sale has a 180 day redemption period I cannot get a straight answer from the IRS about the taxpayers access and posession right to the property after the sale. If I am the successful bidder, can I evict the taxpayer or the taxpayers tenant (if the property is rented) ??

Also, what happens if the taxpayer files bankruptcy during the redemption period?

I do know that if the property is redeemed by the taxpayer then they have to pay the successful bidder the full amount of the bid plus 20 percent annually from the date of payment.

Just because the seller's lawyer approved the offer doesn't mean the bank will (plus you only need the sellers approval, the lawyer is not the owner)...and your offer is subject to bank approval. This means that it does not go pending in the mls....they have to disclose that an offer has been submitted and accepted by the seller...but it won't go pending if the offer is subject to bank approval.

I cant imagine the tenant would win huge sums of money...what sort of civil damages are at play here?

I think the most that would happen is you would be forced to take the sign down. Furthermore...if they aren't paying rent then they are probably owing money all over town...their reputation is shot anyways.

Would a public eviction damage their reputation? I think so..it would also affect their future rental applications...they can't sue you for that.

I would be more worried about what the tenant would do to the house.

Yea the banks dont have to give a written rejection...but the agent can't lie to you about another written offer that has been submitted. He doesn't have to disclose the amount...but cannot lie about the fact that there is/isnt another offer on the table. You can always contact his principal broker to double check. I don't think the agent would have much to gain by lying to you though...an extra 20K makes him like another $600 bucks.

It also doesn't sound like the property was initially approved at 240K...real approvals come in writing and only happen once an offer is accepted. And values are certainly not on the rise.

Also, in a short sale, multiple offers can be submitted...just because you wrote an offer that was accepted by the seller does not mean the propery goes pending...it stays active due to the short sale.

It doesn't sound like anybody is lying...just sounds like another typical short sale that is listed on the market...a pain.

Well its not rent skimming (skimming from who anyways?)...and if you have an option to buy you have the legal right to enter into any contract with an end buyer or renter...it is no different than a sandwhich lease option...in a sandwhich lease option you have no obligation to pay the mortgage...the homeowner is on the hook no matter what. You don't own the property but lease it out to a 3rd party...the money you receive from the 3rd party (your tenant) has no relation to the mortgage payment.

Also, homeowners in default vacate their houses for any reason they see fit...mostly because they are done caring about the property...they have to leave anyways, why not move on with their life before they bank evicts them.

It is also no concern of the investor why the homeowner chooses to move out.

If you can swing it timing wise it is a good deal for several reasons...the house doesn't sit vacant....you have somebody living in it that knows the deal (you disclose to them exactly what is happening and charge them a monthly rent below market value)...they can show the house for you if need be...the utilities get paid...and the investor can make some positive cash flow while negotiating...let's stop pretending this is hurting anybody...and most of all...dont make me think for a second we are concerned about the lender losing money because the investor is profiting....its the homeowner in default on the hook and nobody else.