dlmcgill,
Thank you for pointing me to Section 7-311
Yes the definition of “foreclosure reconveyance” does go on, but the rest of the definition is the relevant part. There are two parts to the definition of a “foreclosure reconveyance”
First (as you have already stated) is the transfer of title from the homeowner to another party (the foreclosure investor in our case), AND
second, the investor subsequently conveys, or promises to subsequently convey interest back to the homeowner.
A foreclosure reconveyance agreement is essentially a repurchase agreement between the seller and the foreclosure investor that is executed after the foreclosure preceeding has been resolved.
When a property subject to a foreclosure reconveyance is sold to a third party instead of to the original seller anytime with an 18 month period after entering the foreclosure reconveyance agreement, the investor is required to give the seller 82% of the net profit from the sale.
I still maintain that the 82% rule does not apply if there is no agreement to resell the foreclosure property back to the original seller. Stay away from a foreclosure reconveyance agreement and your sub2 business should be able to keep all the resale profits.