All Forum Posts by: Tom Gimer

@Dave Hart A release would not be recorded until the note is paid in full. 

In a perfect world an assignment (like @Chris Seveney suggested) would be recorded with each transfer of the note but in reality that does not occur. Lenders fail, go out of business, merge, etc. Yes, this creates problems for title companies and title insurers to resolve. 

@Jordan Sachs This is 100% a state law issue... developed through court cases over time. There are rules and exceptions to the rules -- it's actually pretty interesting if you take the time to research it. You'll be surprised how many cases there have been and how the law has developed.

Do a quick search for Pennsylvania tree laws or Pennsylvania tree liability and you'll see what I'm talking about.

A smart seller will have note, deed of trust/mortgage/etc. prepared by a local real estate attorney (yes, he/she may work with/at the title company) and be sure the security instrument is properly recorded in the land records. 

If you're the buyer, you don't sell the note. That's would be a decision the seller/lender could make. 

If you want to sell your interest after closing, it would be the property itself. Now, if the deal is so sweet that someone may want to step into your shoes prior to closing for a large fee, make the contract including the seller financing terms freely assignable and ironclad.

Good luck.

Perhaps @Ned Carey will chime in but IMO the valuation should have occurred prior to bidding. The tax certificate will expire, so if you never start the foreclosure process what was the point of purchasing the lien? Since the owner needs to pay your attorneys fees (essentially limited by statute, so can be estimated) in connection with a redemption, all of that math should be part of the planning. Also title to figure out if the land can even be used for a particular purpose.

But to answer your question regarding value, a decent metric is the current tax assessed value of the parcel:

https://sdat.dat.maryland.gov/RealProperty/Pages/default.asp...

Or you could pay for a broker price opinion..

@Godsheritage Adeoye And for anyone else considering this... in Baltimore City you need a current lien certificate to record a deed. That certificate would show open taxes, water, housing violations, citations, condemnations, receiverships, construction liens and other municipal liens. Unless those items are all satisfied (except for housing violations and some non-monetary liens which follow the property), the department of finance will not allow the deed to pass through to the next stop in the recording process.

So even if you wanted to dump a property that was totally upside down with liens to someone who was willing to take it from you, you can't do it. It's insane. The property either has to go through the tax sale process, receivership, or some other program (donation, etc.) to have the liens abated. 

What that lien cert would not show you, however, are open mortgages, judgment liens, tax liens, other non-municipal liens, pending litigation, and the like. So if I was dealing with a seller who was insisting on handling the transfer this way, I would be wondering what the seller is trying to hide... and I would figure it out.

Quote from @Charlie MacPherson:

Thanks, Tom.

Do you think that can be done retroactively?  Years after the first spouse signed?

Yes.

I know nothing about ME law specifically but I assume that can be done in accordance with local customs… Either by obtaining a court-certified copy of the original easement and re-recording it with all of the required signatures OR recording a confirmatory deed of easement which spells out the error and corrects it by including everyone who should have signed the original. 

If the missing spouse has since passed away his or her legal representative (PR, Executor, etc.) could sign. 

@Charlie MacPherson Unless all affected owners agreed to the easement, the agreement is a nullity. 

In this case is doesn't matter how the owners held title... T/C, J/T, TbyE, the solution is the same... and the solution is to get the missing owner(s) to sign the easement agreement. 

Quote from @Jay Hinrichs:

Quote from @Eyal Goren:

Quote from @Mitch Messer:

Quote from @Eyal Goren:

I read that every mortgage has a Due on Sale clause, which means you have to notify the lender when you sale the property and pay the entirety of the loan when you sell the property. 

How do people work with the clause and make these kinds of deals?

First, let's be very clear here.

The mortgage your speaking of is a private agreement between the seller and the lender. The "due on sale" clause (DoSC) obligates the seller to notify the lender if the property is sold.

Failing to do so would place the seller in violation of this agreement, giving the lender the right to accelerate the loan.

But no laws are being broken here.

So, subto is neither legal nor illegal.

Second, it only works because most lenders are more interested in receiving payments than in invoking the DoSC clause and foreclosing on the property.

But, it can work, provided seller and buyer are both on board and the proper process is followed.

Thanks for the clarification. What happens if the lender does accelerate the loan? I guess the seller would like to address that in the agreement. 

If you dont pay the loan off it goes to foreclosure and the original owner gets their fico CRUSHED.  its highly risky for most mom and pops to sell on sub to.. and its simply not a way for those without substantial wherewithal to buy property and keep the seller safe.. Lots of absolute nightmares come out of sub to when folks get into title but dont have the money to pay the loan off or the ability to refi.

Short term, leaving financing in place during rehab prior to resale — great strategy with limited risk to either party. 

Long term hold, with buyer planning on carrying existing financing to term without the ability to quickly cure default — terrible strategy with huge risk for both parties. 

A seller cannot “cancel” a contract that has been prepared properly unless the buyer breaches its terms. The key is knowing how to force a seller to comply with the agreement.

@Michael Anderson If the property had been sold, it would make sense to formally assign the lease and deposit to the new owner and memorialize an agreement to collect and adjust rents after settlement, indemnify the other party for things arising during their respective ownership periods, etc. 

But because this was not an arms-length sale, the tenant could simply be notified of the change in ownership and where/who to send future rent payments. The tenant does not need to consent to the transfer of ownership.