Can the foreclosing bank of my rental house that results in a deficiency judgement somehow find out that i have OTHER rental properties (held in land trusts) and therefore put a lien on them???..OR should I be asking Does the foreclosing bank EVER??? supeona me to court to ASK me if I have ANY properties in trust or own any beneficial interest…etc…
I am looking for REAL LIFE answers…
does ANYONE know what REALLY happens in real life (not what is possible)???
First the disclaimer. I’m not an attorney and I’m not attempting to give legal advice.
Having said that, I have had a couple of attorneys pull up all the case law they could find about land trusts in Texas. The problem is there isn’t very much case law out there regarding land trusts.
Therefore, it’s hard for anyone to give you “real life” answers. I’ll give you my best guess though, which by the way is about all an attorney can do for you as well.
You ask two questions:
Can the bank find out I own other properties held in land trusts and attach a lien to those properties.
I don’t believe they can do that because you don’t own the properties. The land trust owns the properties. If they ask you if you own other properties the answer is no. The trust owns the property NOT you.
Will the bank ask me if I have any properties in trust or own any beneficial interest in a trust.
This is the correct question for the bank to ask and the answer would be yes. However, I don’t think the banks attorney will know to ask this question.
Again, it goes back to the fact that there isn’t much case law regarding land trusts. Therefore, land trusts are not a creature attorney’s deal with on a daily basis so they probably won’t know to ask.
This is going to change as more and more people begin using land trusts. Banks and their attorneys will wise up and start asking the right questions.
That’s the best I could do. I welcome anyone else’s opinion on this subject. I just didn’t want your post to go unanswered.
I have never been investigated by banks searching for deficency anything. The worst that happend to me is a 1099 that showed $30,000 debt reduction which is income. I had enough losses that year and was able to offset the gain from the sale.
In both Chapter 7 and 13 BK filings you would be asked to provide interests in land trusts etc but as Stacy replied you do not actually own these. I would disclose everything as I learned the hard way that not disclosure is not very good.
Let me know if I can help further
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
A deficiency judgement will go against you personally and will attach to any real property you hold in YOUR NAME. Since you don’t own any real estate in your name, you have nothing to worry about from the marketabiliy of the property point of view. If there are two or more unrelated co-beneficiaries within the land trust-so much the better. The judgement will appear on your credit report which will make the cost of borrowing more expensive for you. After a resonalble wait, the judgement can be settled for pennies on the dollar. Go and sin no more.
All attorney’s have detailed check lists when they depose you. I don’t have personal knowledge, but I would presume that a bank’s attorney would be slick enough to ask “do you own any real property or do you have any beneficiary interest in any real property”???. Of course you truthfully answer the question, but only the question. You don’t volunteer information.