Foreclosure Effect on 1st or 2nd
Effect of Foreclosure on the Second when the First Forecloses
Let's say that you find a foreclosure that is worth $100,000 and the property owner owes the Bank on a 1st mortgage $60,000 with $500/mo P & I and owes a 2nd mortgage $10,000 with $100/mo P & I
The Bank (1st Mortgage Holder) is Foreclosing and the property goes to a public sale.
The highest bidder will own the property. The proceeds of the sale will be paid to the first mortgage holder (bank) first; to the second mortgage holder second; to other lien holders, if any, third; and the remaining proceeds will go to the owner.
Example:
Case 1: You are the high bidder at $75,000 (You are now the owner of the property)
Case 2: You are the high bidder at $65,000 (You are now the owner of the property)
Case 3: You are the high bidder at $60,000 (You are now the owner of the property)
Effect of Foreclosure on the First when the Second Forecloses
Same story as above but the 2nd is foreclosing!
Foreclosure is worth $100,000 and the property owner owes the Bank on a 1st mortgage $60,000 with $500/mo P & I and owes a 2nd mortgage $10,000 with $100/mo P & I
The Bank (2nd Mortgage Holder) is Foreclosing and the property goes to a public sale.
The highest bidder will own a note. The proceeds of the sale will be used to satisfy the second mortgage holder.
The high bidder now must contact the first lien holder, to purchase the mortgage holders.
Keep in mind that no lender has to sell their note.
To actually own the property you will have to start a foreclosure proceeding after you purchase the 1st mortgage.
Note: If you do not purchase the 1st mortgage and just hold the 2nd mortgage and the 1st mortgage holder forecloses on the property and not enough funds to cover your note come from the sale or the property is purchased back by the bank "Becoming an REO" you will loose you investment.
From my experience when a 2nd mortgage/trust deed holder forecloses the highest bidder will own the property subject to the 1st mortgage/trust deed holder's http://www.interest.The highest bidder will not own a note. Any proceeds in excess of the 2nd mortgage/trust deed goes to any junior lienholders and once they are satisfied the remaining funds if any go to the previous owner.By the way I am in California.
As I stated on the first reply!
When you bid on a 2nd mortgage it is secured by the property "You do not own the property!", as it is subordinate to the 1st. In order to own the property you would have to purchase the 1st mortgage note and upon the 1st mortgage note becoming delinquent you would have to foreclose on the subject property to own it.
When you purchase a 2nd, 3rd or even a 4th mortgage in foreclosure "YOU DO NOT OWN THE REAL ESTATE"!
To own real estate you must be able to take title!
You do not take title in a 2nd, 3rd or even a 4th mortgage in foreclosure as it is only a note secured by real estate! As you stated subject to the 1st.
When you are the successful bidder on a 2nd, 3rd or even a 4th mortgage in foreclosure you are simply a subordinate lien holder. "YOU DO NOT OWN THE REAL ESTATE"!
John Michael.
let me qualify my earlier post. here in new york, being a judicial foreclosure state, if a 2nd mortgage lender forecloses, the successful bidder at auction gets title to the property subject to any senior liens of record. Now i have personally bought at auctions whereby the 2nd foreclosed. I received a REFEREES DEED, (the equivalent of a TRUSTEES DEED in your state) and in each instance i contacted the 1st for payoff. I had title to the property. Now i know that you are from Missouri and that laws may differ as to the actual foreclosure process, and there maybe rights of redemption after the sale but the purpose of a foreclosure sale is universally the same throughout the country. To sell the premises to the highest bidder, not sell the mortgage to the highest bidder..if i am wrong please site law whereby a successful bidder at a 2nd td sale, acquires the note and not title.
It looks like there is no point to continue on the issue!
So I simply state a few facts!
When you purchase a 2nd in a foreclosure proceeding you do not own the subject property until you get title, what I am stating is the simple fact that the property must be fully in your name or your business entity. If you do not clear priority liens such as a 1st mortgage you do not own the property.
When you pay off the 1st that is not delinquent you the holder of the 1st mortgage now, you can not simply tell the homeowner they have to move this is why foreclosure laws were established in each and every state.
The laws were established not to long after the great depression to protect homeowners. You as an investors must follow the rules of foreclosure as well.
Just because an investors may have convinced a homeowner they have to move and they did because you purchased the 2nd in a foreclosure proceeding and than purchased the 1st from the lender that was not delinquent does not void foreclosure laws.
Example: Predatory lending was done and laws and policies were established by lenders and federal agencies to attempt in preventing this in the future. Just because it was done does not make it right and legal!
Before issuing this article I consulted with my real estate attorney and he agreed fully with me.
Investors, no matter how many agree or even disagree with me; it really does not matter! Consult with your attorney!
It's a fact that you can invest in real estate using all kinds of creative investing strategies some legal and some not but if you follow the letter of the law you will not be faced with a legal action towards you!
Throughout my years of investing I have seen investors use all kinds of strategies to buy real estate and I have seen many make large profits and in turn they have lost it all because they failed to follow the legal system.
lp1 wants me to prove by law that what he has done is legal, but I make this one simple statement!
What law allows you as an investor to purchase a 1st mortgage that is not delinquent and take the property without due process of law?
In support of my article:
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See Single Family Mortgage Foreclosure Act of 1994 at http://uscode.house.gov/search/criteria.php
Also see Shane v. Winter Hill Fed. S&L, 492 N.E.2d 92 (1975); C&S National Bank of S. Car. v. Smith, 284 S.E. 770 (1981); Gluskin v. Atlantic S&L Association, 108 Cal. Rptr. 318 (1975); Gulesarian v. Fields, 218 N.E.2d 397, 351 Mass. 238 (1966); Strong v. Stoneham, 310 N.E.2d 607, 2 Mass. App. 828 (1974); 100 Eighth Avenue Corp. v. Morgenstern, 150 N.Y.S. 471 (1957); Amoskeag Bank v. Chagnon, 572 A.2d 1153 (Sup.Ct. N.H., 1990); Kaminskas v. Cepauskis, 17 N.E2d 558, 369 Ill. 566 (Sup. Ct. 1938); Avondale Shipyards, Inc. v. Belcher, 754 F2d 1300 (La. 1985); Houston Lumber Co. v. Skaggs, 613 F.2d 416 (Sup Ct. of N. Mex.1985); Peterman-Donnelly Eng. & Con Corp. v. First National Bank, 408 P2d 841 (Ariz. App. 1965); Rock River Lumber Corp. v. Universal Mortgage Corp. of Wisconsin, 262 N.W.2d 114 (Wis. 1978); cf. Pelican Homestead v. Security First National Bank, 532 So.2d 397 (La. 3rd Cir. 1988).
Cases cited in 50 Am Jur. Subrogation, §107 at note 8. Subordination of Purchase-Money Mortgage special Rule.
See Citizens & Southern National Bank v. Smith, 284 S.E.2d 770 (S.C. 1981); Gluskin v. Atlantic S&L Association, supra; MCB Ltd. v. McGowan, 359 S.E2d 50 (N.C. App. 1987); Southern Floridabanc Federal Savings v. Buscemi, 529 So.2d 303 (Fla. App. 1988); Dickens v. First American Title Insurance, 784 P.2d 717 (Ariz. App. 1989).
Miles Home Div. Of Insilco Corp. v. First State Bank, 782 S.W.2d 798 (Mo.Ct.App. 1990).
Some notable cases related to 2nd's and foreclosure:
In Barnes V Resolution Trust Corporation 664 So 2nd 1171 (4th district 1995) the second mortgagee (lender) began making payments on the first mortgage after the second mortgagee had foreclosed on the second mortgage. Thereafter the first mortgagee sought to foreclose on the first mortgage. The second mortgagee argued that acceptance of installment payments by the first mortgagee from the second mortgagee estopped the first mortgagee from acceleration and foreclosure.
The Court disagreed and stated that "by terms of the mortgage, the first mortgage holder had a contractual right to foreclose when mortgagors (borrowers) defaulted. The first mortgage holder was not obligated to second mortgagees as they were not parties to the first mortgage, nor did they ever assume the first mortgage and there was no evidence that the first mortgagee...induced second mortgagee to continue making payments to satisfy first mortgage.
Also in Travers v Tilton 134 So 2d 807 (2nd DCA 1961), which suggests that to constitute estoppel, the mortgage holder must engage in conduct which intends, or reasonably calculates, to mislead to the detriment of the party asserting an estoppel.
Suggested readings on the issue:
Kravotil and Werner, Modern Mortgage Law and Practice, (2nd Ed. 1981),
Nelson and Whitman, Real Estate Finance Law, §10.5 (2nd Ed. West 1985)
Rosser, "Second Mortgages: Coming of Age," Mortgage Banking, (November 1983)
My point is not to prove right or wrong. The point is to invest wisely.
Simply review the facts, make a wise decision, and above all never take ones word for it! Simply investigate and invest.
Why did I check with my attorney on this for the simple reason that many of my students had questions on this issue and many investors had the same opinions as many that posted replies to this article but in a much more professional manner so when in doubt get legal council.
This is my opinion and I am sticking to it!
John Michael
It’s not my job to run this train;
The whistle I can’t blow.
It’s not my place to say how far
The train’s allowed to go.
It’s not my job to shoot off steam
Nor even clang the bell.
But let the damn thing
Jump the track . . .
and see who catches Hell!
Do you suppose this thread has jumped the track?
John $Cash$ Locke
Ownership of real estate is granted to a person or persons in several types. The most common type of ownership seen is a grant in fee simple, which grants ownership of real estate to a person absolutely and unconditionally. Such a grant gives the person the right to the entire real estate with power to possess it and to transfer it to other persons.
If two or more persons are granted ownership of real estate, there are several ways they may own it together.
One way is known as a “tenancy in common.” This form of ownership gives the owners a unity of possession with separate and distinct titles to the real estate belonging to each owner. Each owner has a right to separately convey and transfer his/her title to the real estate. If one of the owners dies, his or her title passes to his or her heirs.
A second form of ownership for real estate is known as a “joint tenancy.” In this form of joint ownership of real estate, each owner has one and the same interest in the real estate. The owners hold the right of survivorship, which means that if one of the owners dies, his/her interest automatically passes to the other owners.
A third form of joint ownership of real estate is known as a “tenancy by entirety,” or “estate by entirety,” which has the attributes of joint tenancy, plus the marital relationship of husband and wife. In this form of ownership, the interests of husband and wife in the real estate are viewed as one. There is a unity of ownership with a right of survivorship.
Another form of ownership found in some states is known as “community property.” In a community property state, each spouse to a marriage has an undivided one-half (1/2) interest in the real estate. This relationship only applies to real estate owned by the husband and wife.
Alabama: Alabama recognizes the following types of ownership: tenancy in common and joint tenancy with right of survivorship, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the conveyance expressly states that a joint tenancy with right of survivorship is being created. Alabama Code §35-4-7.
Alaska: Alaska recognizes the following types of ownership: tenancy in common and tenancy by entirety, but not community property and joint tenancy. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a husband and wife create a tenancy by entirety between them. Alaska Code §34.15.120 through .140.
Arizona: Arizona recognizes the following types of ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the deed contains an express statement that a joint tenancy is being created and accepted by the grantees. A conveyance to husband and wife during the marriage is presumed to be community property, unless expressly stated in the conveyance that a joint tenancy is being created and accepted by the grantees. Arizona Code §33-431.
Arkansas: Arkansas recognizes the following types of ownership: tenancy in common, joint tenancy, and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the conveyance expressly states otherwise. However, a conveyance to husband and wife creates a tenancy by entirety. Arkansas Code §18-12-401, 603.
California: California recognizes the following types of ownership: tenancy in common, joint tenancy, community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the instrument specifically states that a joint tenancy is being created. In the case of husband and wife, the rules of community property apply. California CC §761, 682-85.
Colorado: Colorado recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the instrument specifically states that a joint tenancy is being created. Colorado Code §38-31-101, 107.
Connecticut: Connecticut recognizes the following types of ownership: tenancy in common an joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the conveyance specifically states that a joint tenancy is being created. Connecticut Code §47-36a.
Delaware: Delaware recognizes the following types of joint ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. Delaware Code §25-311, 701.
Florida: Florida recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated. A right of survivorship must be specifically stated. Florida Code §689.14-.15.
Georgia: Georgia recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. Georgia Code §44-6-190.
Hawaii: Hawaii recognizes the following types of ownership: tenancy in common, joint tenancy, and tenancy by entirety. Hawaii does not recognize the community property type of ownership, except for land acquired from 6/45 through 6/49. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise expressly stated in the conveyance. Hawaii Chapter 510.
Idaho: Idaho recognizes the following types of ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. If the grantees are husband and wife, the real estate is considered to be community property. Idaho Code §55-104, 508.
Illinois: Illinois recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. In the case of husband and wife, a tenancy by entirety is created. Illinois Code §765-1005/1, 1c.
Indiana: Indiana recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. In the case of a deed for husband and wife, a tenancy by entirety is created. Indiana Code §32-1-2-7, 8.
Iowa: Iowa recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. Iowa Code §557.15.
Kansas: Kansas recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated. Kansas Code §58-501.
Kentucky: Kentucky recognizes the following types of ownership: tenancy in common, tenancy by entirety and joint tenancy without a right of survivorship, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the instrument. Kentucky Code §381.050, 120.
Louisiana: Louisiana does not recognize common law estates. Joint ownership is referred to as ownership in indivision. All co-owners re presumed to be equal. Co-owners may convey or alienate their individual shares, but consent of all owners is necessary to affect the whole real estate held in indivision. Louisiana CC §797-806.
Maine: Maine recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is specifically created. Maine T.33, §159.
Maryland: Maryland recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless expressly stated otherwise. In the case of husband and wife, Maryland law presumes a tenancy by entirety is created. Maryland Real Prop. Art. §2-117.
Massachusetts: Massachusetts recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the deed expressly states otherwise. Massachusetts C. 184, §7.
Michigan: Michigan recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. In the case of a conveyance to husband and wife, it is presumed a tenancy by entirety is created. Michigan CLA §554.43-.45.
Minnesota: Minnesota recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is expressly created in the conveyance. Minnesota Code §500.01, .19.
Mississippi: Mississippi recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. Mississippi Code §89-1-5.
Missouri: Missouri recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. Missouri Code §442.025, .450.
Montana: Montana recognizes the following types of ownership: tenancy in common, joint tenancy and partnership, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. Montana Code §70-1-306, 314; 70-15-202.
Nebraska: Nebraska recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is expressly created in the deed.
Nevada: Nevada recognizes the following types of ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. The community property law applies to husband and wife. Nevada Code §111.060-.065; 123.030.
New Hampshire: New Hampshire recognizes the following types of ownership: tenancy in common and joint tenancy, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. A conveyance to husband and wife as to tenancy by entirety creates a joint tenancy. New Hampshire C. 477, §18-19.
New Jersey: New Jersey recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise stated in the conveyance. In the case of husband and wife, a tenancy by entirety is created unless stated otherwise. New Jersey Code §46-3-17, 17.2, 17.3; 3B-11-3.
New Mexico: New Mexico recognizes the following types of ownership: tenancy in common, joint tenancy and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is expressly created in the conveyance. In the case of husband and wife, community property is presumed. New Mexico Code §47-1-36.
New York: New York recognizes the following types of joint ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless expressly stated otherwise in the conveyance. In the case of married persons, a tenancy by entirety is presumed to have been created. New York E.P.T.L. §6-1.1, 6-2.2.
North Carolina: North Carolina recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise expressly stated in the conveyance. North Carolina Code §41-2.
North Dakota: North Dakota recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is expressly created in the conveyance. North Dakota Code §47-02-05.
Ohio: Ohio recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety created prior to April 4, 1985, but not community property and tenancy by entirety after April 4, 1985. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise expressly stated in the conveyance. Ohio Code §5302.17-.21.
Oklahoma: Oklahoma recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless the conveyance specifically and expressly creates a joint tenancy or tenancy by entirety. Oklahoma Code §58-911-12; 60-74.
Oregon: Oregon recognizes the following types of ownership: tenancy in common and tenancy by entirety, but not joint tenancy and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, except in the case of husband and wife in which case a tenancy by entirety is created. A right of survivorship may be created if specifically expressed in the conveyance. Oregon Code §93.120, .180.
Pennsylvania: Pennsylvania recognizes the following types of joint ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy with right of survivorship is specifically created. In the case of husband and wife, a tenancy by entirety is created. Pennsylvania Code §68-110.
Rhode Island: Rhode Island recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise expressly created in the conveyance. Rhode Island Code §34-3-1, 2.
South Carolina: South Carolina recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a right of survivorship is expressly created in the conveyance. South Carolina Common Law.
South Dakota: South Dakota recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety or community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy with right of survivorship is expressly created. South Dakota Code §43-2-11 through 14.
Tennessee: Tennessee recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless expressly stated otherwise including a statement of a right of survivorship. Tennessee Code §66-1-102 onward.
Texas: Texas recognizes the following types of joint ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a right of survivorship is expressly stated in the conveyance. In the case of a husband and wife, community property law applies. Texas Prob. Code §46, 451; Fam. Code. §5.01 onward.
Utah: Utah recognizes the following types of ownership: tenancy in common and joint tenancy, but not tenancy by entirety and community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy is expressly created in the deed or conveyance. Utah Code §57-1-2 onward.
Vermont: Vermont recognizes the following types of joint ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless otherwise expressly stated in the conveyance. In the case of husband and wife, a tenancy by entirety is created. Vermont Code §27-2.
Virginia: Virginia recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a right of survivorship is expressly stated by the conveyance. Virginia Code §55-20, 21.
Washington: Washington recognizes the following types of joint ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy with right of survivorship is expressly created in the conveyance. In the case of husband and wife, the real estate is community property. Washington Code §26.16; 11.04.071; 64.28.010-.040.
West Virginia: West Virginia recognizes the following types of joint ownership: tenancy in common and right of survivorship, but not community property. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a right of survivorship is clearly stated in the conveyance. West Virginia Code §36-1-10 onward.
Wisconsin: Wisconsin recognizes the following types of ownership: tenancy in common, joint tenancy and community property, but not tenancy by entirety. A grant of ownership of real estate to two or more persons is presumed to create a tenancy in common, unless a joint tenancy with the right of survivorship is specifically created in the conveyance. In the case of husband and wife, community property law applies to the real estate. Wisconsin Code §700.02 onward; 766.605.
Wyoming: Wyoming recognizes the following types of ownership: tenancy in common, joint tenancy and tenancy by entirety, but not community property. Wyoming Code §34-1-140.
This is my final post on this issue, the facts are the facts and as always when in doubt seek legal council.
This article was written upon my personal experience and that of legal council.
No I am not giving legal advise or the like of just wanted to share based up my experience do with it what you will, bash it, discredit it, make assumptions, attack it! It really does not matter as I still make money-doing business as a real estate investor the honest way!
As an investor one can scream, kick and yell all the way to court that I learned it from? I read it in? So and So said it was ok?
It does not matter, when an investor does not follow the letter of the law a defense of not knowing the law will not hold up in any court.
So take the advise form an old time investor when it sounds to easy, when it does not protect a property owner, when it is not backed by law, when the only one that wins is the investor you have reached an area of danger so seek council from a professional not a book, not a seminar, not a forum! But that of a professional who will back you in a legal action if one should arise.
This is not a discredit to any poster as all have a right to state their position (even me), this forum; books, seminars or the like of as all have their place in the learning process!
As an investor I have dealt with many land trust transaction, made great profits, tough the subject to my students and studied the laws surrounding this form of investing but do I keep doing it because it worked even though law suits are mounting throughout the country on this issue? No, I stop until the dust settles so that I may continue to profit as an investor and not spend a fortune in legal fees!
So let's get on with the business at hand, learning and making money with real estate investing!
So in short, be a wise investor!
John Michael
I think this is a very important topic for real estate investors to be informed about. Thanks to all for their insights. However, I now am not so sure I understand the correct proceedures and their consequences.
Can some of you please recommend a published book or resource that can give an outline and a more indepth analysis on this subject?
Terry
I hadn't even read the article until a few moments ago. What caught my eye was the controversy... and since I, too, have spotted a few of your material misstatements on at least 2 of TCI's forums... I was curious.
I read the article and this is what immediately jumped out at me, as it did most well informed readers:
In your article, and I quote, "The highest bidder will own a note." endquote.
Typically, the 'mortgage' and/or 'note' isn't offered for sale at public auction. The property is ordered sold to pay a debt.
In your comment, you correctly assert:
"When you purchase a 2nd, 3rd or even a 4th mortgage in foreclosure "YOU DO NOT OWN THE REAL ESTATE!"
That is correct... but the purchase of a mortgage and note, whether it's in foreclosure or not, is a separate transaction.... outside the scope of a forced, foreclosure auction.
Good Luck with this.