"Equity Purchase" "Foreclosure Consultant" Lease Option Question
I want to market to people that have received a notice of default (to purchase their home). But California has a number of laws "protecting" people in foreclosure:
Home Equity Purchasing: Ca Civil Code Section 1695
Foreclosure Consultant: Ca Civil Code Section 2945
My attorney says, just don't work with people that have received a notice of default. I don't want to break any laws. AND I don't want to suffer the consequences of walking the line.
So the question: how can you legally enter a lease option with someone that has received a notice of default (pay up all their back payments and split the remaining equity with them)?
It looks to me like you after you find your buyer, you have to find an Agent and give him the listing and selling commission and ask him to post a bond worth twice the price of the home. Is that correct? It doens't seem like it would be worth it. The result - instead of receiving help (without "California legislative protection"
the poor owner loses his home to the lender. That can't be right? Is it?
Using a L/O for your private investing is not the same as being a Foreclosure Consultant (but you still have to follow the other requirements like giving no money to the Seller before five days, etc.). This is actually a good law, as many predators are taking advantage of people in foreclosure by claiming to be able to stop the process and charging exorbitant fees to do so.
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"A deal is only as good as the quality of your Contracts." --Me[ Edited by LeaseOptionKing on Date 01/07/2005 ]
If you buy the property from an owner in default and gave him/her option to buy back whie they are leasing from you (L/O), it can be re-caracterized as a "loan" under CC1695 and you have to worry about breaking usury law. (I am not a lawyer.)
Never allow the Seller to stay in the house OR to repurchase it.
[addsig]