#3 Foreclosures ContributorPosted Congrats on getting them to accept deed in liu will save your credit! Another option I thought of was pulling from your retirement funds if that can make up the LTV. You are in a solid market that should appreciate over the long term.
A DIL does not save your credit. It shows as an amount settled for less than full amount due. While its not as bad as a foreclosure, it's bad.
#3 Foreclosures ContributorPosted Depends on where in preforeclosure it is and what state you are in. If you have 30 days or more, it's like any other sale. Get a lender, enter into contract, close escrow, enjoy your new home. if you have less than 30 days, you would need the seller's cooperation to contact the foreclosing entity to see if they will postpone to give you time to close the deal. it's not guaranteed and the lender is under no obligation to do so but if everyone wins (seller sells, lender gets paid off in full, you get a home), most lenders will provide a small window of time to get it done. I wouldn't unless i could see a fully executed purchase and sale agreement, proof of funds, and an underwriting approval. If i did have all of that, i'd postpone.
#3 Foreclosures ContributorPosted Hi!
I just bought my 1st investment property, a brand new home with DR Horton, and used DHI (DR horton lender) for the mortgage, they told me they were going to sell the mortgage and I should wait for that before moving it to the LLC. Now PennyMac, is saying that they won't let me do the change.
I have concerns about tax benefits and liability. I rented to house within 3 weeks and they are paying to the LLC bank account and I am paying the mortgage with the LLC account.
Has anybody dealt with this? Any ideas on how to make this work without having to pay off the mortgage? I'm also looking for a tax lawyer and accountant who can help me with my taxes and this situation.
Thanks
Just curious. Did you get an owner occupied loan on this property with the intent of renting it out?
Conventional loan means it is backed by Fannie Mae and Freddie Mac. Fannie and Freddie do owner occupied and investment loans, but they have different guidelines.
Did you tell the lender you were going to move into the property and then not move in?
That's not what "Conventional Loan" means. A conventional loan by definition is a loan that is not an insured government loan.
LOL...sell a loan in the secondary or underwrite one once in a while and you'll see what i mean. Read a regulation or seller servicer guide once in a while and you'll know what i mean. Oh, maybe just read the CFPB definition of conventional loan? You probably will still not know what i mean.
#3 Foreclosures ContributorPosted What's the enforcement action if you bid but are not a qualified bidder?
Nothing at all currently. AB 1837 attempts to address that but hey, it's the government so for sure they'll screw it up if 1837 passes.
#3 Foreclosures ContributorPosted I understand it varies by jurisdiction of course, but.. Since this post got bumped, I'd love to hear any tips or tricks anyone would care to share about your last minute "game plan" if you happen to get a strong lead to reach back out/etc, with under 24-48 hours before auction.
(other than having cash/equivalent, preliminary title report, and the appropriate deed ready to go 'on hand')
The MOST difficult part of this will be getting the lender to provide you with the reinstatement figure to bring the loan current (I do this and take title sub-to because it's actually easier to get the lender to provide a reinstatement than a full payoff).
To do this, contact the lender WITH the seller on the phone. Tell them that you're helping out the homeowner and have the funds to bring the loan current. Don't give up. Call back as many times as it takes until you get someone on the line that can do this for you. Sometimes they'll provide the figure and you can wire it in. I've brought cashier's checks to the auctioneer at the courthouse steps to stop the sale before. Other times the lender gave us a postponement (anywhere from 7-14 days) to get the funds sent in.
This is like pulling off a touchdown drive with a minute on the clock and no timeouts. It's nerve-racking, but a rush if you can get it done and help the homeowner avoid losing their home at auction.
I'm suspicious of your recollection of how it works. You brought cashiers checks, to the foreclosure sale, with the intent to stop the sale? I can tell you that isn't how California foreclosure sales work. I can tell you if you are not an attorney you would be running afoul of California foreclosure consultant registration laws if you applied your scenario to a borrower in foreclosure. I can tell you that the borrower has no legal right to reinstate the loan at the courthouse steps. I can tell you a reinstatement and a payoff quote come from the same department in a bank and, follow the same parameters per federal rule.
Maybe it's pulling off a touch down with 1 minute to go but sounds like maybe scoring on the wrong end of the field.
Maybe you meant something different or maybe this is a tactic for a different state or, maybe I just misunderstood what you were trying to say.
#3 Foreclosures ContributorPosted Aloha!
Does anyone know how we contact a bank for a foreclosure property? Iʻm a new investor and donʻt know where to start.
Mahalo!
#3 Foreclosures ContributorPosted Hi!
I just bought my 1st investment property, a brand new home with DR Horton, and used DHI (DR horton lender) for the mortgage, they told me they were going to sell the mortgage and I should wait for that before moving it to the LLC. Now PennyMac, is saying that they won't let me do the change.
I have concerns about tax benefits and liability. I rented to house within 3 weeks and they are paying to the LLC bank account and I am paying the mortgage with the LLC account.
Has anybody dealt with this? Any ideas on how to make this work without having to pay off the mortgage? I'm also looking for a tax lawyer and accountant who can help me with my taxes and this situation.
Thanks
Just curious. Did you get an owner occupied loan on this property with the intent of renting it out?
Conventional loan means it is backed by Fannie Mae and Freddie Mac. Fannie and Freddie do owner occupied and investment loans, but they have different guidelines.
Did you tell the lender you were going to move into the property and then not move in?
That's not what "Conventional Loan" means. A conventional loan by definition is a loan that is not an insured government loan.
#3 Foreclosures ContributorPosted I want to start a discussion re the due on sale clause
We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking.
One lender/servicer is HomeLoanServ. They actually are looking at prior foreclosures that were reinstated.
What are you folks seeing? Are you taking measures to protect your deals?
Thanks and let us know -- let's get info flowing
Alan
Your comment: "We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking."
Although forthcoming and we appreciate the honesty, it does not build confidence in the process.
The ramifications are serious, especially when we consider the crowd in the "subto community" and how it's being promoted there. If something could be done to convince the head "guru" that buying overleveraged properties in and of itself is reckless for creative finance, done so that he can boast he has “none of his own money involved” and attract people with little money to join his program, perhaps the trajectory of the conversation could be more positive toward solving the problem.
But, Why would we want to promote his risky & bad investing?
I think it's a slow motion train wreck as it stands. I want no part of it.The guru methods of "Sub Tos" is not how we consult on assumptions. We paper them differently and have numerous disclosures and checks and balances in place to ensure the deal is as risk free as currently possible.
I agree the gurus are soiling this industry quite a bit. Thus, my effort to tighten it up a bit via open discussions and disclosing how we are doing these the right way.
Nothing you do to put lipstick on this type of transaction matters if the lender isn't aware and supportive, and no, they aren't going to be supportive of a sub to or wrap. There is no right way to do a sub to. There is a reason notes have a due on sale clause, so that they can have a response to a sub to or wrap. You can smoke and mirror and paper them any way you want but YOUR transaction doesn't involve or jump in front of the transaction between the original borrower and the lender. YOUR transaction by its very nature conflicts with the lender's instructions in the note and violates the term of the note between the lender and the borrower.
Yes, people get away with it every day but no, there is no "right way" to do a sub to/wrap because the lender explicitly states and the borrower agrees at the time of origination, that it cannot and won't be done. Just because you do it, and just because you got away with it, doesn't mean you did something the right way. You just didn't get caught.
And god help you if you do it to a borrower in financial distress or if you do it in a state that prohibits equity skimming, requires licensure or registration, or other nefarious acts against homeowners.
1st - it is not equity skimming. Equity skimming requires a nonpayment of the underlying mortgage -- to skim the equity -- this is not occurring. The payments are being issued or the property is recovered. There is no license that allows equity skimming. This is an illegal act.
2nd - this is a deed of trust issue and not a promissory note issue.
3rd - A wrap is not precluded. A wrap gives a lender the right to act in certain ways. Why do people not understand this? A buyer and seller are accepting the risk of this permissive right being acted upon. Proper disclosures are needed. Eyes wide open acceptance of the risk is needed. I agree this does not occur in all the wraps occurring now. Thus - the reason for the post here. Let's protect all parties -- including the lender. I do not want to hear unfounded illegal claims - unfounded breach claims - unfounded unethical claims - or anything else. My purpose is to better a system for all involved -- ALL.
I will say again - ad nauseam - the lender is not harmed in any manner whatsoever. This is no different than taking advantage of a legal tax loophole. The lender is paid. The lender is required to be paid by not only their borrower -- but another party. This is a betterment for the lender. More security.
Let me ask this -- if you are a - "these things are illegal/unethical/wrong/stupid/or whatever person -- start a new thread. I seek to help and advance in a positive manner. Advance all parties -- including lender.
Love you guys -- but troll elsewhere if a nay sayer -- and post here if you have some constructive info or knowledge -- I never claim to be the smartest -- just trying to hear from the smartest.
That's the beauty of lawyers. They think they know everything and litigate to prove it. One side always loses so at least one of the lawyers is always wrong, or, the other lawyer had a better line of B.S. at least. You lost me completely by your failure to understand that if a buyer approaches a seller and offers to take over their property subject to the lender's lien, and stops paying and puts that borrower into default or, if the borrower was in default already, that "buyer" may run afoul of local/state laws and may be accused of equity skimming. Some greasy lawyer will no doubt jump in and say its not equity skimming, when it is.
Troll elsewhere? You're the one trying to drum up business, and pretty defensive too. Who's the troll?
Wow -- you are a bit angry. Did you answer the question -- if the foreclosure is avoided and 2 are responsible to pay the mortgage, how is the lender harmed?
Kinda hard to troll a post when I am the poster. You funny.
I receive no dollars from my info posts. I receive no dollars from helping the way we do on these. Disparage and rant elsewhere angry one. I aint selling programs -- advertising coaching -- mentoring for dollars -- nothing. Why the hate brother.
You are challenged to dispute -- with facts, not false statements and presumptions -- anything I present to the group. However, you fail to do this. You choose to troll.
I wish you the best - but you really need to seek other threads to spew hate and baseless allegations -- please -- there are other options for you to Karen out. I seek input from the folks wanting to do this better - who want to improve the industry standards.
I wish you well - but will not reply to any more of your hate. You take care of California - we got Texas.
Anyway...whatever you tell yourself in the mirror to make yourself seem legit is ok with me.
I have no hate. You just like to use trigger words when you get called out for your ambulance chasing tactics that you just can't help. its in your DNA. its in your nature. you can't help yourself. Tried to come off as some sage but your audience has been dealing with this subject for decades and your fluff quickly fell apart when we poked holes in your "theories". Sell some snake oil elsewhere.
#3 Foreclosures ContributorPosted I want to start a discussion re the due on sale clause
We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking.
One lender/servicer is HomeLoanServ. They actually are looking at prior foreclosures that were reinstated.
What are you folks seeing? Are you taking measures to protect your deals?
Thanks and let us know -- let's get info flowing
Alan
Your comment: "We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking."
Although forthcoming and we appreciate the honesty, it does not build confidence in the process.
The ramifications are serious, especially when we consider the crowd in the "subto community" and how it's being promoted there. If something could be done to convince the head "guru" that buying overleveraged properties in and of itself is reckless for creative finance, done so that he can boast he has “none of his own money involved” and attract people with little money to join his program, perhaps the trajectory of the conversation could be more positive toward solving the problem.
But, Why would we want to promote his risky & bad investing?
I think it's a slow motion train wreck as it stands. I want no part of it.The guru methods of "Sub Tos" is not how we consult on assumptions. We paper them differently and have numerous disclosures and checks and balances in place to ensure the deal is as risk free as currently possible.
I agree the gurus are soiling this industry quite a bit. Thus, my effort to tighten it up a bit via open discussions and disclosing how we are doing these the right way.
Nothing you do to put lipstick on this type of transaction matters if the lender isn't aware and supportive, and no, they aren't going to be supportive of a sub to or wrap. There is no right way to do a sub to. There is a reason notes have a due on sale clause, so that they can have a response to a sub to or wrap. You can smoke and mirror and paper them any way you want but YOUR transaction doesn't involve or jump in front of the transaction between the original borrower and the lender. YOUR transaction by its very nature conflicts with the lender's instructions in the note and violates the term of the note between the lender and the borrower.
Yes, people get away with it every day but no, there is no "right way" to do a sub to/wrap because the lender explicitly states and the borrower agrees at the time of origination, that it cannot and won't be done. Just because you do it, and just because you got away with it, doesn't mean you did something the right way. You just didn't get caught.
And god help you if you do it to a borrower in financial distress or if you do it in a state that prohibits equity skimming, requires licensure or registration, or other nefarious acts against homeowners.
1st - it is not equity skimming. Equity skimming requires a nonpayment of the underlying mortgage -- to skim the equity -- this is not occurring. The payments are being issued or the property is recovered. There is no license that allows equity skimming. This is an illegal act.
2nd - this is a deed of trust issue and not a promissory note issue.
3rd - A wrap is not precluded. A wrap gives a lender the right to act in certain ways. Why do people not understand this? A buyer and seller are accepting the risk of this permissive right being acted upon. Proper disclosures are needed. Eyes wide open acceptance of the risk is needed. I agree this does not occur in all the wraps occurring now. Thus - the reason for the post here. Let's protect all parties -- including the lender. I do not want to hear unfounded illegal claims - unfounded breach claims - unfounded unethical claims - or anything else. My purpose is to better a system for all involved -- ALL.
I will say again - ad nauseam - the lender is not harmed in any manner whatsoever. This is no different than taking advantage of a legal tax loophole. The lender is paid. The lender is required to be paid by not only their borrower -- but another party. This is a betterment for the lender. More security.
Let me ask this -- if you are a - "these things are illegal/unethical/wrong/stupid/or whatever person -- start a new thread. I seek to help and advance in a positive manner. Advance all parties -- including lender.
Love you guys -- but troll elsewhere if a nay sayer -- and post here if you have some constructive info or knowledge -- I never claim to be the smartest -- just trying to hear from the smartest.
That's the beauty of lawyers. They think they know everything and litigate to prove it. One side always loses so at least one of the lawyers is always wrong, or, the other lawyer had a better line of B.S. at least. You lost me completely by your failure to understand that if a buyer approaches a seller and offers to take over their property subject to the lender's lien, and stops paying and puts that borrower into default or, if the borrower was in default already, that "buyer" may run afoul of local/state laws and may be accused of equity skimming. Some greasy lawyer will no doubt jump in and say its not equity skimming, when it is.
Troll elsewhere? You're the one trying to drum up business, and pretty defensive too. Who's the troll?
#3 Foreclosures ContributorPosted I want to start a discussion re the due on sale clause
We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking.
One lender/servicer is HomeLoanServ. They actually are looking at prior foreclosures that were reinstated.
What are you folks seeing? Are you taking measures to protect your deals?
Thanks and let us know -- let's get info flowing
Alan
Your comment: "We are seeing more issues re lenders calling notes due. Some because of mistakes with insurance. But, some due to lenders looking."
Although forthcoming and we appreciate the honesty, it does not build confidence in the process.
The ramifications are serious, especially when we consider the crowd in the "subto community" and how it's being promoted there. If something could be done to convince the head "guru" that buying overleveraged properties in and of itself is reckless for creative finance, done so that he can boast he has “none of his own money involved” and attract people with little money to join his program, perhaps the trajectory of the conversation could be more positive toward solving the problem.
But, Why would we want to promote his risky & bad investing?
I think it's a slow motion train wreck as it stands. I want no part of it.The guru methods of "Sub Tos" is not how we consult on assumptions. We paper them differently and have numerous disclosures and checks and balances in place to ensure the deal is as risk free as currently possible.
I agree the gurus are soiling this industry quite a bit. Thus, my effort to tighten it up a bit via open discussions and disclosing how we are doing these the right way.
Nothing you do to put lipstick on this type of transaction matters if the lender isn't aware and supportive, and no, they aren't going to be supportive of a sub to or wrap. There is no right way to do a sub to. There is a reason notes have a due on sale clause, so that they can have a response to a sub to or wrap. You can smoke and mirror and paper them any way you want but YOUR transaction doesn't involve or jump in front of the transaction between the original borrower and the lender. YOUR transaction by its very nature conflicts with the lender's instructions in the note and violates the term of the note between the lender and the borrower.
Yes, people get away with it every day but no, there is no "right way" to do a sub to/wrap because the lender explicitly states and the borrower agrees at the time of origination, that it cannot and won't be done. Just because you do it, and just because you got away with it, doesn't mean you did something the right way. You just didn't get caught.
And god help you if you do it to a borrower in financial distress or if you do it in a state that prohibits equity skimming, requires licensure or registration, or other nefarious acts against homeowners.