All Forum Posts by: Philip Traynor

Did you purchase title insurance?  This is exactly what it is for.  Make a claim with the title insurer, and they will most likely hire title counsel to handle the quiet title action at no cost to you.

Hi John, it makes no difference if the trustee is unaware of the death of the borrower.  In fact, it is fairly common to have to rescind sales because someone was deceased and that information hadn't made it into the public records yet.  The trustee is basically just an auction vendor for the foreclosure firm, but the firm does run checks to see if the borrower is deceased at several points in the process.  Standard practice is to run a check at referral, when the notice of sale is posted, and the day before and the day after the sale.  

I would recommend getting the eviction moving ASAP.  The appellate courts are very backed up right now, so if your tenant appeals, you can be looking at several months before you can get them out of the property.  The sooner you start that process, the better.  Feel free to ask any specific questions you may have about the process.  

Hi Chad, 

Generally speaking, you are correct that a probate court can unwind the foreclosure sale for up to four years after the date of death.  It is rare, but it does happen.  The more practical consideration is that no one will write a title insurance policy for that property until the 4 year statute of limitations runs.  

However, there are a number of caveats that may make this not an issue.  For example, if this was a reverse mortgage and the cause of the default was the death of the borrower, this is fine.  If the law firm conducting the sale has properly addressed any heirship interests, this may be fine.  Who is the firm handling it?  Feel free to message me if you don't want to share specifics here.  

Would anyone have a form/sample Alaska ALTA Loan Policy they would be willing to share?  I am trying to compare how the standard policy in Alaska compares to other states.  Whatever you have would be greatly appreciated - sample form, redacted policy, etc.  Thanks in advance!

 I didn't mean to imply that the banks intentionally choose to bid 65% of total debt. I realize that is not how they calculate their bids. However, after reviewing a lot of bids in Texas, when the property has little or no equity, 65% is a pretty good estimate of what the opening bid will be. I was just trying to give a ballpark. 

There are really two different numbers at work. The first is the total pay off which consists of the UPB, accrued interest, attorney's fees, property preservation fees, late fees, inspection fees, property taxes, property insurance, and I'm sure half a dozen other fees I can't think of. This total payoff can often add up to more than the original loan amount, but if the borrower asks the bank for a payoff so they can sell the property, this is the number they get. I don't know the typical timeline in Oregon, but a basic example assuming 12 missed payments with your numbers would be:

Interest (5%) = $3500

Late fees (12x$35) = $420

Attorney's fees = $4,000

Property Inspections (12x$15) = 180

Property taxes = $2000

Property insurance = $1500

Appraisal = $325

Property Preservation = $365

UPB = $70,000

Total Debt = $82,290

The other number is what the bank will bid at the foreclosure auction.  The banks tend to be very tight lipped about how they arrive at that number, but it seems to be about 65% of the total debt if there is little to no equity in the property.  

As an investor, your wiggle room is in that 35% the bank expects to lose if they have to go through the foreclosure process.  If you can make an offer for a short sale that is in that sweet spot and still make money yourself, everyone wins.  In this example, say you offered $60,000.  The bank would get more than having to go through foreclosure and avoid additional atty fees, the borrower gets out from under the property, and you walk into the property with $40,000 in equity, minus all your costs and repairs, of course.  

Hi Jeffrey,

I have never been to Tarrant, but spend a lot of time at other north Texas auctions.  My guess, given the size of the Tarrant County sale, is that they have multiple trustees crying sales at the same time.  Auction.com might have one sale going on while a local trustee company has another and a major foreclosure firm has someone crying their own sales in another area.  At least, that is how it works in Dallas.  Smaller counties tend to do one at a time.  

If that is the case, in addition to the normal research you do on the properties you plan to bid on, you just need to pay attention to who the trustee conducting the sale is.  That information will be listed in the Notice of Sale.  Once you get to the sale, there is nothing wrong with asking around about where a particular trustee is set up.  

The other explanation is that Tarrant holds their sheriff/constable tax sales at the same location as the regular trustee foreclosure sales.  If that's the case, its usually pretty obvious as the guy crying the sale is in uniform and carrying a gun.

One thing I have seen from my own experience renting VRBOs is additional amenity/equipment rentals.  I have rented cribs from owners and seen bicycles, kayaks, etc. available, depending on the local area.

Hey Y'all (I'm not really from Texas, but I feel its my duty as a transplant to try to fit in as much as I can),

I am an attorney representing mortgage lenders in all aspects of mortgage default: foreclosure, bankruptcy, tax sale, loss mit, etc., in my day job.    I am here because I am seriously contemplating jumping into personally investing in tax sale properties and turning them into rentals.  I have already learned an incredible amount by just reading through these forums over the last several months, and can't wait to engage with everyone!

It will likely be a while before I can offer any useful advice on investing, but if you have any questions on foreclosure in Texas, Florida, or Oklahoma, I would love to be able to help in any way I can.