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Old 11-11-2009, 11:18 PM
 
19 posts, read 74,924 times
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Hi All,
I'm seriously considering investing in a piece of real estate that is in tax foreclosure is due to be auctioned. I'd like to help the current owner redeem the property and then file a quit claim deed
At this time the mortgage company is not pursuing payment via a foreclosure sale or judgement and the current owner hasn't made a payment in over a year.
I wondering if, after filing a quit claim deed, the mortgage company will come after me, the new owner. It is a gamble, I know, but I'm figuring that MAYBE the mortgage company will continue to let it pass under the radar.
Thanks in advance.
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Old 11-12-2009, 06:54 AM
 
2,669 posts, read 6,706,005 times
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Sounds dicey to me, if I'm understanding what you're saying. The grantor can file a quit claim deed in your favor, but it doesn't impact the lender's rights at all. The lender may have "given up" only because they know the current owner doesn't have the ability to pay, and they just haven't gotten around to foreclosing yet for various reasons such as volumes, cost, etc. And since you presumably are in better financial shape than the grantor, they would likely come after you eventually. They likely couldn't force you to pay the outstanding balance (since the loan is between the original owner, and the quit claim deed doesn't change that), but they can still foreclose.

Seems the preferable option would be to work with the lender directly on a short sale. The lender avoids the hassle and costs of foreclosure, and you get clear title to the property. Have you considered that approach?
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Old 11-12-2009, 07:20 AM
 
19 posts, read 74,924 times
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That sounds like a good idea... short sale.
It all seems so risky. It's just that we were hoping to get into a home and not have a mortgage for a while. I was thinking that if I do a quit claim deed then at least the current owner is free of the property.
Then I was thinking if the mortgage company mails us the mortgage lein we could negotiate. I am so green on this issue.
I really want the home... love the character, potential, and interior. Is it foolish to get into the home and wait and then settle/make a deal (like a short sale) with the mortgage company later?
I'm glad I'm posting on here because I need the honest feedback. If it's too risky then my husband and I need to drop the plan.
However, I am going to the county clerk today to see is a lien has been filed the mortgage company at all. The mortgage hasn't been paid for over a year!
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Old 11-12-2009, 07:36 AM
 
Location: ITB Raleigh, NC
814 posts, read 1,898,448 times
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I am not sure I would rely on the comments of some people that you don't know on a website about something as potentially risky as this.
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Old 11-12-2009, 07:40 AM
 
Location: Cary, NC
39,553 posts, read 68,581,448 times
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Quote:
Originally Posted by Usedtobe VaNC View Post
I am not sure I would rely on the comments of some people that you don't know on a website about something as potentially risky as this.
I think you are right.

This question is a good reason for the Cook's tour of Attorneyville, particularly the Real Estate neighborhood of Attorneyville.

If the goal is to not have a mortgage payment for a while, there are ways to finance a home with deferred payment, usually by some sort of a buydown by the Seller. That topic is good reason for a tour of Lenderland.
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Old 11-12-2009, 07:56 AM
 
2,669 posts, read 6,706,005 times
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Agreed, this is not something to "play around" with, so don't. You need good legal advice on something like this.

I will say, as an anonymous internet poster (who happens to work in the business) , that lenders are extremely willing to work things out these days in hopes of avoiding foreclosure. If they haven't been paid in a year, you can bet they'd be anxious to get something/anything out of the deal. So you should certainly contact them and explore the options, but only after you become familiar with the options by talking with someone who can explain them to you. As I said, I think your best option would be to low-ball them with a short sale offer, but obviously I don't know all the circumstances.
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Old 11-12-2009, 08:07 AM
 
9,197 posts, read 23,630,156 times
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Whether the bank comes after you or not, the lien will still be there. How will you ever get a mortgage or loan against the property, sell it, get title insurance, etc.? The property will have no value until that lien is removed.

I agree with the others - talk to an attorney. But quite honestly this seems like a really stupid move to me.
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Old 11-12-2009, 08:56 AM
 
19 posts, read 74,924 times
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Thank you for all responses. I needed straightforward and honest answers. That's what I needed. Thanks again.
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Old 11-12-2009, 08:59 AM
 
9,803 posts, read 14,940,823 times
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Quote:
Originally Posted by envz View Post
Hi All,
I'm seriously considering investing in a piece of real estate that is in tax foreclosure is due to be auctioned. I'd like to help the current owner redeem the property and then file a quit claim deed
At this time the mortgage company is not pursuing payment via a foreclosure sale or judgement and the current owner hasn't made a payment in over a year.
I wondering if, after filing a quit claim deed, the mortgage company will come after me, the new owner. It is a gamble, I know, but I'm figuring that MAYBE the mortgage company will continue to let it pass under the radar.
Thanks in advance.
Do you actually believe the mortgage holder is going to sit idly buy and let that proprerty be auctioned off for taxes without them having a bid in ?
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Old 11-12-2009, 09:04 AM
 
28,461 posts, read 79,297,920 times
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I would suggest the OP do a little more investigation on their, because from what they've posted they seem to be misusing some fairly simple and standard real estate terms.

A quit claim deed is a way to GIVE AWAY any right to a property. This is typically done after a debt is settled. It is also a way for parties that are jointly on a title to separate themselves, often after a divorce.

When you buy the tax debt on a property the ABSOLUTE LAST THING you would want to do is anything with a quit claim deed. You are NOT investing by paying the back taxes, you getting a lien. If the home owner /debtor wants to have clear title and sell the place to get their equity out they have to pay YOU. Local laws matter A LOT in trying t do this, as in some cases the laws give the debtor a lot of leeway as to how long till they can redeem the taxes. You must determine what exactly you get for paying the taxes -- it can vary from merely a right to collect an administrative fee to first shot at paying off the rest of the debt on the property. You have to determine which liens are 'subordinate' and which are 'superior'.

If you are instead suggesting that the current borrower who has not paid their mortgage or taxes would be able to give YOU any interest property by filing a quit claim deed you are mistaken -- they would only be able to give that right back to the lender. There is NO WAY to expect that even the most incompetent lender what screw up and think that some third party that pays back taxes would magically have clear title to a property.

It is entirely possible that if the property has value in excess of what is owed to the mortgage company that the lender will eventually take possession and they are notorious for not being very timely in settling with those who have paid back taxes. There is pretty much NO WAY that they would expect you to make good on the mortgage -- in MOST cases they would need you to sell your lien rights to them so they could market the property but that is not a guarantee and they have the giant legal teams to try and convince the taxing bodies to settle back taxes in bulk. You will lose.

If there is NO EQUITY it might make sense to consider paying the taxes if they are relatively low and the house might still be desirable at the foreclosure auction depending of the rules in your state / county. If the position of your lien is such that the state / county takes settlement on it at the court house auction it could be profitable with little hassle, but as right now there are a FLOOD of properties that will never sell for anything close to what is owed you have to be super careful that you understand what you are buying.
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