All Forum Posts by: Brian Pendergraft

I don't buy tax liens myself but I do help my clients foreclose and can explain the legal process.  So any expenses you incur after about 4 months from the date of the tax sale become reimbursable (attorneys fees, title search fees, etc.).  At that time you can hire an attorney.

First thing I do after getting hired is perform a title search to see who has interest in the property.  Then I send them the required notices to file a complaint.

Then, after the notices expire (after about two months) I can file the complaint to foreclose the right of redemption.

In my experience most people actually redeem the property by paying off the lien and my client's expenses before I can file the complaint to foreclose.

Owner's have the right to stop the foreclosure by paying off your expenses and the lien up until the final court order.  Which they often do.

For the complaints I've filed last December I still haven't had a court date yet.  So the owner's can still stop the foreclosure.

I still think it's worth doing.  But I'd only do it if I could buy lots of liens so hopefully 1 or 2 actually result in obtaining a property.

@Bob Malecki as @JR T. stated a mortgage loan is considered consumer debt.

But let's IRAC this too because why an explanation as to why can never hurt.

Issue: Are residential mortgages considered consumer debt?

Rule: Consumer debts are personal debts as opposed to business or government debts.

Analysis: Residential mortgages are personal debts.  They are loans to individuals to buy homes for personal use.

Conclusion: Residential mortgages are considered consumer debt.

Time to apply the IRAC method.

Issue: Do you need a license to invest in non-performing notes in Maryland?

Rule: Maryland Code B.R. § 7-101(c) defines a collection agency as follows: "Collection agency" means a person who engages directly or indirectly in the business of...(ii) collecting a consumer claim the person owns, if the claim was in default when the person acquired it.

Analysis: By buying a non-performing note, you are collecting a consumer claim that was in default when you acquired it.

Conclusion: You need to be licensed as a collection agency to buy non-performing notes in Maryland.

Licensed attorneys in your jurisdiction are the best place to get contracts that comply with your jurisdiction's rules and protect your best interest.

The Protection of Homeowners in Foreclosure Act (PHIFA) is written so broadly that almost anyone who offers services to people facing foreclosure becomes a foreclosure consultant (even me as a legal service provider!).   You are a foreclosure consultant the moment you communicate to a homeowner that you can:

• Stop, delay, avoid, set aside, void, or delay foreclosure.
• Obtain forbearance or exercise the right of forbearance.
• Help the homeowner obtain a loan
• Purchase or obtain an offer to purchase a home within 20 days of an advertised docketed or foreclosure sale.
• Arranging or facilitating the sale of the home to another party as an alternative to foreclosure.
• For more see Md. Real Property Code § 7–301.

Chances are if you're marketing to pre-foreclosures you are already a foreclosure consultant.

What Foreclosure Consultants Must (and must not) do under PHIFA

• Provide a "foreclosure consulting contract" that outlines the scope of work to be provided for the homeowner.  (It must be in a certain format).
• Cannot receive ANY compensation until after all services outlined in the contract have been performed.
• Cannot acquire an interest in the property or help family members acquire an interest.
• Can only be compensated with money. (No securities in interest or personal property).
• Forbidden From "foreclosure rescue transactions".
• For more see MD Real Property Code Md. Real Property Code § 7–307.

Also, there is a limit to how much Foreclosure Consultants can get paid.

Disclaimer - Legal information not legal advice for legal advice contact a licensed real estate attorney in your area. The following post is meant to help readers better understand PHIFA but not to teach them how to be foreclosure consultants.  This is not everything in PHIFA.   Pelanties for violating PHIFA are stiff speak with an attorney before dealing with foreclosures or pre-foreclosures.

None.  Make it clear to your property owner client that he/she is responsible for paying the interest.

Welcome back!  The best place to get a lease is from a landlord attorney in your jurisdiction.  There's no way to tell if free leases found online have been reviewed by an attorney for legal sufficiency.

Welcome to BP @Iggy Smith. Since you plan on landlording try to connect with a solid attorney for landlords in MD & DC.

Glad to have you here!

I think the best place to get them is from an investor-friendly real estate attorney in your jurisdiction that's familiar with wholesaling.  Real estate law is very jurisdiction specific.  An experienced attorney in your area will know what's required to be in contracts in your jurisdiction.

Since you're interested in working with wholesalers check out @Kerry Woods Investor's Workshop.  He's local and puts out good content on wholesaling.