If you are dealing with pre-foreclosures you had better be sure you are treating the homeowner fairly. Illinois is pursuing Foreclosure Bailout Services.
To prevent distressed property purchasers from victimizing others, the legislation would provide numerous protections for homeowners by requiring that:
(1) distressed property purchasers must provide homeowners a written contract that lays out all the terms of the sale and makes it clear that the home is actually being sold;
(2) the homeowner has the right to cancel the contract for five business days after it is executed by all parties;
(3) prior to sale of the property, the purchaser must make a determination that the homeowner has the ability to make rental payments and buy the house back;
(4) the purchaser must pay the homeowner at least 82 percent of the fair market value of the home at the time of the sale and may not include fees as part of the payment;
(5) a homeowner who remains in the home under a rental agreement has the right to cancel the rental agreement at any time;
(6) and the purchaser must record the purchase contract with the county recorder of deeds so that any subsequent purchaser is put on notice.
this for real??? seems like investors in illinois better start lookin elsewhere for a good deal.
what i dont understand with all these laws is: whats the alternative??? letting the house be sold at auction and the owner left on the street? After all is said and done , investors may be raking it in with foreclosure properties. However as far as the homeowner is concerned it is usually the lesser of the 2 evils.
House Bill 1288 which has passed the House and Senate, is now on its way to the governer’s office for signature. This law is aimed at foreclosure investors and prohibits a whole littany of activities when dealing with a seller in foreclosure.
The 22 pages of requirements are very technical, so you should review it in detail with a local attorney. The law gives the seller in foreclosure a 10 day right of recission when selling a property to an investor. This does little more than give a seller a right to “shop” his agreement with you among various investors to see who offers the highest bid. It also restricts a “foreclosure conveyance” (an agreement to resell the property back to the owner) by limiting the amount of profit you can make if you resell the property. And, there’s a dozen other various disclosures, requlations and rules that basically make the good old days of “getting the deed” impossible in Maryland.
If you are in Maryland, do not even THINK about buying a property from a seller in foreclosure without attorney representation in the transaction.
Actually there is a fairly simple solution, reach these folks before they are in foreclsure with your marketing message. The vast majority of them all have something in common and when you see what that is, then you will know who to market to.
Why would you want to make up back payments using a buyers money to cover the back payments or your own money when the money from your buyer could go in your pocket instead fo the lenders.
Never liked to deal with the foreclosure folks for many reasons one is the new laws being passed, saw this coming along time ago. Same thing about Land Trusts as states are looking into shutting them down, not need to hide anything, use corporate entities to protect your assests.
The only state that expressed an opinion about land trusts was NC, where they are passing a law to prohibit subject 2’s. Land trusts are legal and until states can supersede Federal law there is no chance that they will be banned. Perfect example: States legislate and voters approve medical marijuana and the Feds continue to raid cannabis houses and take the pot for themselves.
Nice try, John, but land trusts have nothing to do with this topic on foreclosures. Can you say: Cheap shot???
That’s your opinion, I have mine so if it is not true there was no need for you to answer as I see it going on and that Federal stuff does not fly with me,
States have the right to protect there citizens against fraud and if passing laws to say how Land Trusts can be used is done with their legislators.
Since you wanted to get involved again in a post of mine, why haven’t you answered how much of a Surety Bond your Trustee has for handling 1 billion dollars worth of properties?
You say he was in law enforcement trained at the FBI academy. Does that mean he was an FBI agent or a cop who went to the academy for training as many cops do?
He has been a court appointed receiver, so have I, when I took a Television station from ground zero to the Number 1 independent television station in the US, the courts would ask me to become a court appointed receiver to help straighten out an ailing station.
So your “Psycho Babble” does not impress me, just answer the questions.
Thanks for providing the information on Illinois foreclosure bailouts.
I do not have a problem with any regulations that require people to be fair with homeowners. That’s all this is doing. If I were at risk of losing my home and bearing up under all of the other stress factors associated with it, I probably wouldn’t know how to speak up and get fair treament for myself. I would be grateful for some kind of protection against a few unscrupulous REIs.
IMNSHO, if guidelines enforcing fair treatment hinder the way one does their business, they need to rethink the way they do business.
I also agree with John in that you should deal with folks before they get into foreclosure. When you look at public records in your farm areas you can see trends–people who refi alot or have had a few Lis Pendens followed by a refi. People who pay their taxes late. People whose names show up on many contract case dockets (look in your county court records). Even if they are not in foreclosure right now, they are having problems with their money, and could use a hand before they are hit with the big F.
If states could supersede Federal law, segregation would still exist in America. Land trusts have been legal for 100 years and that won’t change any time soon, nor will Garn-St.Germain, the law that protects land trusts from a DOSC violation. Of course states have a right to protect themselves against fraud and they should.
We all abhor “equity stripping” and the actions of unethical investors who take advantage of people and give us all a bad name. Your “subject to” method has worked well for you over the years and our land trust “subject to” has worked well for us. We are not the vultures and I applaud the states that take action against those who prey on people in trouble. However, North Carolina’s misguided efforts in to prohibit “subject to” transactions should be contested by us all.
The state is not attacking the rights of individual’s to transfer their property into an inter vivos trust per federal law.
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
North Carolina proposed legislation HR Bill 725 in part.
(3) Real estate resale dealer. – Any person who advertises, initiates, or structures a real estate resale transaction.
(4) Real estate resale transaction. – Any agreement however denominated or structured with right of possession in the buyer through which a person who is a buyer contracts with a person who is the owner and seller of residential real property to transfer real or equitable title to the residential real property to the person or the person’s agent, representative, or designee or into a trust for which the person or the person’s agent, representative, or designee serves as either trustee, beneficiary, or both and that remains subject to an existing deed of trust or mortgage.
They are saying that you must licensed in the state if you do more than one real estate transaction per year, so get a license and do your trust, just make sure you are licensed or face the fines. So if you advertise, initiate or structure a real estate transaction you must conform to state law. It has nothing to do with the legality of your trust only the laws the legislators pass to protect their citizens.
I am sure that if someone wants to test this bill out should it become law by giving a seminar or doing a transaction, the state will oblige them.
Yes, Subject To investing in North Carolina will in essence stop the way it is done now, however should this bill pass I will advise my students how to still do real estate transactions and conform to the new legislation with out using trusts.
I would caution any body taking a property subject to especially under those terms. Simply because the due on sale clause is trigger any time interest is transferred. In NC you can contract any way you like as long as it abides to the laws. So you guys that are showing someone how to break the law is uncaused for. There are some many different ways to buy a property. You dont need to break the law. Yes buying a property subject to is against the law. If word ever got out that you transferred a propertys interest illegally and someone wants to prosecute for example a homeowner taken advantage of in distress. There will be a case. YOu can try to twist the words up by saying beneficial interest. The homeowner can burn you any time they want too. Let a few of them rally up. At that point hope you closed down that corp. and opened up a new.
I don’t deal with foreclosures at all but the topic has evolved into subject 2’s and land trusts. I agree with you that subject 2’s WILL be illegal in NC if they pass the law. They are not yet. Land trusts are legal under Federal Law, and will continue to be.
Any homeowner can legally place their property into a trust and transfer the deed to the Trustee. The Trustee legally holds legal and equitable title. The Seller always remains on the note and as a Beneficiary. We protect, not strip, his equity.
Holding your properties in a Land Trust creates one of the greatest benefits, and that is to Easily Transfer your interest. A Beneficial Interest under the Land Trust is considered to be Personality, not Realty, therefore an Assignment of Interest need not be witnessed or notarized. In most real estate transactions the closing can be very time complicated and time consuming. Not so with the transfer of a beneficial interest in a land trust. It is done as simply as transferring your stock certificates in your corporation - no closing costs, no documentary stamps or recording fees.
I know the distinctions are difficult to understand for most laymen and you REALLY seem to be clueless, but Land trusts have been legal for 100 years and are protected under Garn-St. Germain. Garn-St. Germain Act
DUE-ON SALE CLAUSES
Sec. 341. // 12 USC 1701j-3. // (a) For the purpose of this section–,
(d) A lender may not exercise its option pursuant to a due-on-sale clause upon–
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or…
THE LAND TRUST DOES NOT RELATE TO A TRANSFER OF RIGHTS OF OCCUPANCY AND IS THEREFORE LEGAL.
Traditional subject 2’s don’t have the same legal protection and are now under attack but they are still legal. Charlotteplayer, you continue to post a bunch of baloney about subject 2’s being illegal and land trusts being illegal and you have nothing to back it up. What is your agenda here?
you can use your fancy jargon all you want. If you trade beneficial interest to a buyer through a land trust whether it is personal interest or not will be violating the dosc. Do you know what transferring interest means. You violate the clause any time interest or title is transferred. If the homeowner wants to burn you later down the road. If they can prove foul play. Which they can. All they need is a money hungry attorney and half of your butt will be gone.
Beneficial interest in the property is NOT transferred. Beneficial interest in the trust is assigned. Trust is personal property. Read!!!
DUE-ON SALE CLAUSES
Sec. 341. // 12 USC 1701j-3. // (a) For the purpose of this section–,
(d) A lender may not exercise its option pursuant to a due-on-sale clause upon–
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or…
I’ll give you an example. I bought a house in California. Lived in it for two years, then placed it in a land trust, naming my Trustee as legal and equitable owner. The Trust does not refer or relate to a transfer of rights of occupancy.
Two years later, I bought a property in Arizona. I found a Tenant/Resident Beneficiary, made him a beneficiary of the Trust and signed an occupancy agreement with him on the California home. I remained on the Owner Occupied loan and notified the lender (Countrywide). I changed my homeowners insurance to landlord insurance and even provided the loan officer with a copy of the Garn-St. Germain Act. He agreed that they were legally prohibited from exercising the DOSC clause. Case closed.
You are contradicting yourself. First you say "
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or…"
Then you come around an say “Two years later, I bought a property in Arizona. I found a Tenant/Resident Beneficiary, made him a beneficiary of the Trust and signed an occupancy agreement with him on the California home.” You transferred right of occupancy. Also is your subject to owner keeping the beneficial interest. Your fancy jargon mean nothing. Equitable interest is can also be transferred and if transferred violated the Garn-St. Germain Act
Wrong again. I did not transfer right of occupancy. I assigned it to a co-owner of the trust (legally unrecorded). The IRS recognizes it as legal and my tenant gets the tax writeoff.