[Michael-MS]

In the past week, 3 properties have shown up on the MLS in the Las Vegas area that are completely fraudulent. I am not sure if I'm allowed to link to properties specifically. If I am then I can reply with an example.

A property currently listed on the MLS was purchased for $6,000 at an HOA Foreclosure auction in 2013. The investor gained access to the property because of the new law in 2010 that lets HOA liens supersede 1st mortgages. The HOA's are defaulting faster than the banks so they foreclose first.

The investor then rented the property for 1 year at $975 per month. So he's already made profit. Now he is selling the property for $125,000 cash with no title insurance. There is STILL A 1st MORTGAGE on the property for $196,000.

Whoever buys this property for $125,000 will have no title insurance and inherit a lien of $196,000. The investor who is selling the property and only paid $6,000 for it is making over $100,000 profit on a property he has no rights to. The realtors listing the property are stating that the "banks lost the battle" and that the mortgage is bad and can never be claimed. This is an MLS listed property and I find it hard to believe that they are even allowed to list it!!

I also say rental beware, because the investors buying these HOA liens are also renting out the property. The bank who still owns the 1st mortgage that is in default can knock on your door at any time and give you an eviction notice once the house forecloses. So beware!!!

[BBMW]

It would show up on a title search (and anyone who would buy the house without a title search and insurance is an idiot.)

[yellowsnow]

So what would happen if the lein holder(the mortgage holder) showed up at closing to collect from the current 'owner'? What a mess!

[Michael-MS]

Originally Posted by BBMW

It would show up on a title search (and anyone who would buy the house without a title search and insurance is an idiot.)

This is correct. The listing agents are listing these properties on the MLS and stating "no title insurance available". However, they word it in such a way to make the buyer reassured. Saying it's the insurance companies being scared, etc. The listing agents should lose their license IMO.

[lvoc]

Originally Posted by Michael-MS

This is correct. The listing agents are listing these properties on the MLS and stating "no title insurance available". However, they word it in such a way to make the buyer reassured. Saying it's the insurance companies being scared, etc. The listing agents should lose their license IMO.

The present owner should go to court and file a quiet title action. If the HOA sale was done properly he will win and get clear title. I see no reason why he cannot sell it without title insurance if he chooses. However the only one who would buy it would be a local investor who is sure he can clear the title.

the agent is clean as long as it is properly disclosed. The "we ain't lawyer" contingency works for the agent in this case.

Edit - I find nothing at this point in the MLS. Could have been shot or withdrawn...

[LVAllen]

Originally Posted by Michael-MS

There is STILL A 1st MORTGAGE on the property for $196,000.

Depending on for what lien the HOA foreclosed, it's possible there is no more mortgage on the property. If the HOA recorded a lien for nine months worth of dues, and that was the lien that was foreclosed, then all other interests that were junior to the HOA lien (meaning, the mortgage, second mortgage, etc.) are extinguished. The bank has no more of an interest in the house than I do, and a quiet title action will bear that out.

[ddrhazy]

That's why you use a title company to insure the title.

[Michael-MS]

Originally Posted by lvoc

Edit - I find nothing at this point in the MLS. Could have been shot or withdrawn...

All three are still active. Search for cash only under 130k in NLV, they should show up. 2 are in NLV and one is in NW LV. Or PM and I'll send you the MLS numbers if you are really interested.

As far as the legality of it... maybe, just maybe, the banks will give up. But the fact that someone paid $6,000 for a house and has clear title is morally and legally wrong and should be taken to the supreme court to resolve. No way in hell should that title be clear.

[lvoc]

Originally Posted by Michael-MS

All three are still active. Search for cash only under 130k in NLV, they should show up. 2 are in NLV and one is in NW LV. Or PM and I'll send you the MLS numbers if you are really interested.

As far as the legality of it... maybe, just maybe, the banks will give up. But the fact that someone paid $6,000 for a house and has clear title is morally and legally wrong and should be taken to the supreme court to resolve. No way in hell should that title be clear.

I am interested particularly why I did not find them. Drop me a DM with the MLS #s

[LVAllen]

Originally Posted by Michael-MS

All three are still active. Search for cash only under 130k in NLV, they should show up. 2 are in NLV and one is in NW LV. Or PM and I'll send you the MLS numbers if you are really interested.

As far as the legality of it... maybe, just maybe, the banks will give up. But the fact that someone paid $6,000 for a house and has clear title is morally and legally wrong and should be taken to the supreme court to resolve. No way in hell should that title be clear.

The NV Supreme Ct. HAS resolved that issue. Quite recently, in fact. Their view was that the banks could protect their interest by satisfying the HOA lien, or by requiring the borrower to deposit the dues in escrow.