All Forum Posts by: William D.

Gary, I think this is a fascinating strategy. I have researched it in the past and just went through some of my old notes. It is difficult to talk on all points with respect to all states (title theory v. lien theory) and (judicial v. non-judicial).

Basically, what I came down to is that you start with the general premise that absent specific legislative restriction most property rights are alienable. This means there is a policy that you should be able to sell anything -- which would include redemption rights in this situation. However, you need to really step back and view in the abstract what you are actually buying when you purchase redemption rights.

When you give a mortgage deed to a lender you are basically giving them a bundle of rights and retain for yourself the equitable right of redemption. Thus, if you conveyed a quit claim deed to a 3rd party that person would only be getting what you own. And what do you own? The equitable right of redemption. The reason for this is because when you gave the mortgage deed you gave away your interests in the property subject to defeasance. The defeasance incident would be the redemption of the property. This gets complicated when you talk title theory v. lien theory. However, the basic point is that I think you can make the argument that you can convey redemption rights simply through a quit claim deed and don't need a special instrument to evidence your right to redeem.

The second point is the execution of proving standing to redeem. I would imagine a certified copy of your recorded quit claim deed should evidence standing in most judicial states. However, I would think you would some how have to become a party to that lawsuit. Perhaps just filing a motion to be made party defendant would suffice.

I think it is a very interesting strategy but when it comes down to it is it no different than trying to buy pre-foreclosures directly from homeowners (sounds less cutting edge when you put it that way). I would love to hear some stories of people successfully executing the strategy and redeeming as a 3rd party successor to the right of redemption. Unfortunately for me I never made it past the proverbial drawing board.

This is a perfect example of why you should always include in your complaint/writ something to the effect of "all occupants" or "Jane/John Doe". I learned the hard way when the girlfriend showed up to court and said she had lived there the entire time (of course she didn't sign the lease). Good luck.

If you don't need copies, but merely a search I bet you could negotiate a search for under $100 bucks. I would be comfortable with 40 years on residential property (non-condos). I would want 40 years or root of title for condos whichever is less (most condos will only be root of title).

I think your best bet would be to interview a few attorneys and build a relationship with one or two whom you feel comfortable with. Just my .02. There are many knowledgeable and experienced investors on this site who may have different opinions.

Generally, in a Ch-13 situation. The pre-petition payments (all payments missed up to the date of the petition) are paid over 5 years in the Ch 13 plan. It is the obligation of the debtor to start paying the post-petition payments directly to the lender. If not, then you are not adequately protected (given the negative equity) and can file a motion for relief from stay. Most debtor's attorneys wait for this motion to be filed and then enter into a stipulation to make payments or at least adequate protection payments.

The next step is very important, assuming they intend on filing a confirmable plan you need to very carefully review it. If you dont object, you are stuck with the plan. For example, if the plan payment calls for an arrearage of X but your proof of claim if actually X+1 then you are stuck with the plan. There are other tricky things debtors attorneys put in plans that you need to watch out for.

I am not in anyway trying to insult you, I am just trying to let you know that your situation is not what the bankruptcy laws anticipated.

I am a little shocked at how passive you have been as a secured creditor (with a lapsed insurance policy). How can you attorney say there was nothing to do at the 341 hearing? Letting the trustee know the property is uninsured is relevant to everyone. I cant stress this enough, you need to get aggressive by filing a motion for relief or at least trying to negotiate a stipulation. Conventional lenders would have had relief from stay and started foreclosure by now.

I dont see any impropriety from either an ethical or legal perspective. You never had a contract. You merely had an offer to purchase and a counter offer. Even if the bank was somehow able to draw the connection between your entity and you what is the problem with that? That re-listed it on the MLS.

You should file a motion for relief from stay ASAP. Let me get this straight, they are not making post-petition mortgage payments and have not paid for their own homeowner's insurance? You are not adequately protected and should not have to wait around for them to propose a confirmable plan. You need to get a bankruptcy attorney. Do you know if you even filed a proof of claim yet?

Doug, there is no easy answer to the question. Generally the rule of caveat emptor controls the auction. I think you are ahead of the game by not completely trusting your own title searching skills. In addition to searching the land records you are normally on constructive notice of the legality of service of process on each foreclosed out defendant, how anyone other than a professional searcher could confidently do this is beyond my understanding.

I'd say the only way to be confident is to order a 40 year search from a licensed attorney in your state. It would probably be the most expensive but thorough search.

I am not 100% certain but I believe there are certain exceptions for creditor w/r/t speaking to other creditors about a loan. As a senior lienholder you may not need authorization from the borrower to speak to a junior lienholder. I am not sure how far the exception carries but I believe it may be enough to request a payoff and perhaps open up a dialogue about purchasing their debt.

Not sure if you are looking to foreclose or sue on the note but in general there is no statute of limitations on foreclosure actions. The mortgagor would assert laches as a defense. It would be an equitable defense (because foreclosure is an equitable action.)

Obviously check with an attorney as this is just an overview of the SOL issue w/r/t to foreclosures.