Beware Of Delay In Filing Of Deed
Okay, now some may not be aware of this little caveat or some may not hold a deed and post pone filing it like me..
I got bit in the butt yesterday but was aware of the risk and still continue to take that risk as I do not want to record my deed on a particular property until I have obtained and negotiated some loan details on a sub-2 with the existing lender..
Well, the previous owners had an unemployment benefits overpayment and that finally resulted in a lien being recorded against MY property, so I went and talked to them about that yesterday and it turns out she paid it after she got the "letter" (a copy of the lien mailed to her) and not really aware or understanding that is was "filed"; however she failed to pay the penalties, interest, and fees associated with the filing of the lien..
SO, I went down that afternoon and wrote a check paying the remainder due, and because it's F***ing government, they wait 30 days till they'll file a satisfaction, that' really erks me..
In this particular case the owners had previously filed a BK about 2 yrs back, so there is NOT much that can 'pop-up' nor did I expect anything.. But my choice to not file the deed yet and show my complete hand in my negotiations with existing lender is a risk I take..
This is a good fyi & learning lesson for anyone doing property deals, this situation IS VERY LIKELY AND CAN EASILY HAPPEN in any type of contract (lease option/land contract, etc).. I DO NOT buy homes unless I get a DEEEED for reasons I believe I have previously posted.. But all you Lease/Op boys or land contract ppl need to beaware of this potentional problem that can get ya real good if your not lucky..
BTW this lien was only for a couple hundred dollars, thus my not caring, even the owner was urprised that I was going to write a check and pay it, no problem..
Talk to ya kids later..
Chris,
So why do you negotiate anything with the existing lender on a sub2 deal? Are you doing short sales and calling them sub2?
Jeff
First of all, I believe the proper term is to RECORD a deed, not to file it. In any case, I second the original poster's sentiments. Having a deed and NOT recording it is hardly better than NOT recording it at all. I was in the same situation where I got the deed but it got recorded a month after I got it for various reasons, and after I got the deed but before I recorded it a $100k judgement got recorded against the property, which took precedence over my deed because of the recordation order. Recording is ALWAYS for your protection.
Jeff,
When I say sub-2, I mean sub-2 as in existing financing; which you should know exactly what that means being such a common topic on here..
And as for "negotiating" it is not a short-sale in this case, it is an attempt to lower the interest, and roll the loan to minimize my cash out of pocket regarding the default..
Oh, and sorry my other friend, that my vocabulary today was not politically or legally correct.
Take it easy guys,
Chris
"So why do you negotiate anything with the existing lender on a sub2 deal? Are you doing short sales and calling them sub2?
Jeff"
So Compwhiz
What happened after they recorded the 100K, did you quit claim it back ot the owners or....?
Compwhiz said:
Having a deed and NOT recording it is hardly better than NOT recording it at all. I was in the same situation where I got the deed but it got recorded a month after I got it for various reasons, and after I got the deed but before I recorded it a $100k judgement got recorded against the property, which took precedence over my deed because of the recordation order.
There was a time when I could run around in my little VW Beetle with a desk where the passenger used to be. I would buy deeds from householders. The next morning I would try to be first in line at the wicket and "Record" my Deeds
that I had picked up the prior day.
This was a time when I just paid $100 to $200 for the deeds. Most of the proerties were financed GI/FHA and the downs had been negligble.
One happy day I paid the $100 for the deed but when I recorded two other of my competitors had done the same thing and were in just ahead of my deed. So I lost. The other two children in hot pursuit got in a big fight over it and of course the giver of the deed just went right on living there until the unlawful detainer action was completed and the Sherriff came and asked him to move.
The moral of this tale. Dont drive a VW Bug they are much too slow, a Mustang would have made it possible for me to record first.........
Cheers Lucius
Lufous,
That's too much.. I'm ROFL...
You could have prevented this mess with the title being held within a Land Trust.
The Lender could not have batted an eye...
Likewise the Subj-2 Seller would have no problems either cuz the Trust still names them as a beneficiary...
Although you would have also gotten a POAtty + Deed from them and hold Majority voting rights + their forfeited beneficial interest to do as you please... so long as all the payments are being made/satisfied by YOU.
Good luck to all of you investors too shy to record a deed.
[ Edited by DonnieG_NR on Date 10/25/2003 ]
[quote]
On 2003-10-24 20:15, cky wrote:
Jeff,
When I say sub-2, I mean sub-2 as in existing financing; which you should know exactly what that means being such a common topic on here..
And as for "negotiating" it is not a short-sale in this case, it is an attempt to lower the interest, and roll the loan to minimize my cash out of pocket regarding the default..
cky,
My point when I asked the question was that on a traditional sub2 the way it's usually discussed on this site, you aren't telling the lender that you're doing the deal, you're just doing it.. If you're negotiiating the interest, and rolling payments etc with the lender, it sounds less and less like sub2, and more like an asumption, short etc, and it still does to me.
Is the lender in your deal putting your contact info in their file now? If the terms of the financing in place prior to your purchase is different now as a result of your purchase, it is new financing, not Sub2.
Just my opinion,
Jeff
BTW, Good post with regards to recording the deed. And since this method obviously works for you, "Rock On".
Jeff[ Edited by jeff12002 on Date 10/26/2003 ]
Jeff,
Thanks for the input..
No, this is a sub-2, as far as the lender is concerned, I'm a friend of the borrowers trying to help them which is why I'm speaking on their behalf to bring your note up to date and performing.. The owners in their current financial situation cannot maintain this loan and as we both know a foreclosure and reo doesn't benefit your business so lets work this out...
That was my attitude with the lender, and still is, and we've accomplished resolving the back payments, now I'm trying to lower that interest rate, hopefully, we'll see...
And yes the lender does have my contact info, and an auth. to speak with me instead of the owners, but they have no clue I have a interest in the home, nor is it their business or concern, their biz and concern is their note being current and performing..
This is not an assumption on this deal as you kinda thought... Just because you buy sub-2 doesn't mean you can't negotiate past due payments and/or terms of the loan with the lender regarding the existing loan STILL in the previous owners ( borrowers) name(s).
I think I covered your question, if not let me know..
Chris
Chirs,
Would you mind elaborating a bit on negotiating arrears with lenders when buying sub2? How do you "resolve" the back payments?Do you have them rolled to the back of the loan, or do you usually have an increased monthy payment until they are paid off?Or?
Thanks,
Tony
I prefer to have them rolled of course! For obvious reasons, but I find lenders prefer to have the back payments paid over six months in addition to the regular monthly payments beind made on time of course.. Some lenders will give you 12 months to pay it off, but your gonna be biting your teeth in attempt to get a lender to roll the loan especially if it's only 2 or 3 payments behind.. It's a nice thought but not as common...
BTW: You also could just PAY the back payments and bring the loan current...
The obvious that stares us in the face is always the last we think of.. LOL
Chris