SB354 in Texas Legislature threatens Preforeclosure Investing
In an effort to curtail so-called “foreclosure consulting”, a bill introduced by Texas State Senator Craig Estes in the current legislative session contains provisions that will make it almost impossible for legitimate real estate investors to purchase pre-foreclosure property before the auction.
The bill would clasify anyone who “acquires title to a residence in foreclosure” as an “Equity Purchaser” who would then be deemed a “Foreclosure Consultant”, subject to very onerous rules governing the purchase of preforeclosure property.
The most onerous provision would require the use of an Equity Purchase Contract that mandates the total consideration paid to the homeowner be no less that 82% of “fair market value”.
You can review this bill and make your thoughts known by visiting www.capitol.state.tx.us, the website of the Texas Legislature.
To review the bill, click the Bill Number radio button at the top of their homepage and enter SB354 in the query field.
To send an e-mail to your state representative or senator, just use the “Who Represents Me?” dialogue box on the right side of their homepage.
Customer Service Team
Foreclosure Information & Listing Service, Inc.
I think this is a brilliant strategy. Let’s limit the options to homeowners and force more into foreclosure. The banks just don’t have enough REO’s right now.
Can you imagine the lawsuits years from now, as forensic accountants try to determine the value of a home in today’s volatile market?
On the other hand, as an on-again/off-again REO investor, I favor the bill.
It was nice to see that Freddie and Fannie have at least wised up by increasing their loan limit from 4 to 10 homes. Legislators need to let the lenders solve their own problems.
Michelle, I didn’t read the bill, but who do they mean by “homeowner”? In a short sale, don’t you make the offer to the current lender and then they decide if they will accept the short sale or not? I don’t see how this protects the actual family living in the home, only helps out the lender. But then again, with the option of a short sale taken off the table, I guess more families will just end up losing their homes to foreclosure which in the end helps noone.
This will help no-one, if short-sale is not a possibility, the bank will end up with the property and we will buy from the bank at a steep discount. No investor is going to pay 82% of retail…