All Forum Posts by: William D.

A general note on recording residential purchases and sales contracts is that they should comply with your state's statute of frauds requirements. If they don't then you could be subject to a slander of title claim. For example, most contracts supplied by the local Realtor associations do not require witnesses. However, if your state's statute of frauds and conveyance act requires that the contract for purchase be witnessed and acknowledged to record then you just recorded on the land records an improperly executed instrument.

It would be more desirable to executed a bond for deed (if you intend on recording your contract)which is normally acknowledged, witnessed, and attaches a legal description.)

I think the second question by Bill was whether or not you could purchase the note itself. Pretty interesting scenario.

Off the cusp, you may run into some merger issues whereas you now own the first position mortgage and have a fee interest. Generally, the lesser interest (mortgage) merges into the greater interest (fee) and the mortgage is extinguished.

So, in your example above, lets say you pay 50% FMV for the note and along with it get assigned the mortgage. You now have the right to enforce the note, and the right to foreclose comes with it. However, because you also are the fee owner the rights under the mortgage (not the note) will merge into the fee. Thus, you will now have an unsecured note (which you shelled out a chunk of change for) and your only recourse is against yourself. Further, any other encumbrancers would be elevated in priority so it's possible that a second mortgage would now become a first and fully secured by the equity you paid for.

The only way around merger is to structure if though entity ownership and such. This is where the fraud will most likely come in.

D.D., here in Connecticut only an attorney can act on behalf of an LLC for purposes of filing an appearance and bringing an eviction action. This same rule applies to things like filing an action to discharge a mechanic's lien or any other type of litigation. With that said, there are many things that you (as agent) can do such as send the initial notice to quit. As everyone above has mentioned, it looks like it depends on the state to determine the pros/cons of an LLC entity structure.

The seller has the claim to the deposit, not the bank. Think about it, the purchase and sales contract is between you (the buyer) and the seller; whereas, you the buyer promise to buy and the seller agrees to sell for an agreed upon price , conditioned upon the bank releasing their lien for less than they are owed. The bank is not a party to the transaction in a legal sense.

If you legitimately breached the purchase contract and all contingencies have passed then a 50% refund is not a bad deal. The seller lost that entire time period of marketing so it seems like a fair result to me.

How do you hold title currently? By what legal instrument did you inherit it from? Was it a certificate of devise? You may be able to disclaim your interest in the inheritance. If not, then you need to get title out of your name immediately. Contact the city or even HUD to see if they would be interested in taking title to the property.

I agree that a warranty deed is better than a quitclaim deed but in the scenario above I don't think it matters. In fact, you may want to use the quit claim deed.

First, you cant really provide a warranty deed with a mortgage on the property because there is a creditor with a claim to the property via a security interest. I mean, because it is from individual to LLC (which is wholly owned by individual) it really doesn't matter but to get technical you are providing a warranty deed and already breaching one of the warranties. You never know where this could come back to bite you (probably will never happen but it is an interesting dilemma to discuss in the abstract)

Secondly, a warranty deed without a title policy really doesn't mean too much. A subsequent buyer will still have to get their own title policy so its not like they will rely on your warranty deed in lieu of their own policy so I don't see how the QCD versus the WD will slow up a sale in the future.

Just to add to the adverse possession or prescriptive easement issue, the best way to combat the problem as the fee owner who is subject to the loss via adverse possession is to record on the land records a notice. Some states have statutes regarding the language of the notice and whether it has to be served but it is the typical penny wise/pound foolish example to not spend a couple dollars to protect your rights.

Just to add to the MERS issue. If you find that MERS is the mortgagee it is not the end of the road for locating the servicer. On the top of the instrument you will find a MERS Mortgage Identification Number (MIN). You can use this to look up on MERS' website who the current servicer of the loan is. (I believe this is free)

Of course, without participation from the seller (or 3rd party authorization) you cant find out payoff figures from the servicer but at least you could let the seller know who the current servicer is.

You got a long road ahead of you if you haven't even started a partition action. Generally, the judge can craft two different types of orders (1) he can order a forced sale; or (2) an order conveying title. There are different ways that title can be conveyed aside from a deed (a court order is one of them). Obviously your seller will want the latter of the two remedies. But, given the equity in the property it is unlikely that a judge will just strip the husband of his interest in the property. To do this you will have to show years of payments made solely by the wife, along with maintenance records, etc.

As for the first option of the forced sale, the property will be sold by a third party at an auction (probably resembling something to a sheriff's sale or foreclosure auction). Your buyer can obviously bid here but this will be done along with the general public (and the lender).

I would walk away from the deal if I were in your buyer's shoes. It will be an expensive and uphill battle for your seller if she cant get a deed through negotiation from her husband and is relying on the judicial system.

You need to look at the short sale process through eyes of the lender. If you continue to make principal and interest installments on an asset that has a LTV close to FMV why would you want to release your lien for less than you are contractually owed. Most loss mitigation strategies are for the benefit of the lender (hence the term "loss mitigation").

I am not sure what you were approved for, maybe some short sale pre-approval process that gets the ball rolling on the paperwork but you cant be approved for a short sale without a contract and a HUD-1. The servicer may just be reviewing and collecting your financial to determine whether or not you even qualify initially based on your financials. If you can show affordability it is doubtful they will give you a short sale without asking for a note back.

If you are having issues with the value you should continue to send them updated listing agreements and price reductions to evidence the fact that you are professionally marketing the property but to no avail at the current listing price. As for the particular area you want considered, as for a copy of the lender's BPO and bring it to your own broker to see if he can explain why that market area is being excluded.

Good luck.