Most Short Sales Illegal In CA During Forclosure? Comments
I am getting back into short sales ...trustee sales ect after laying off for 8 years now that foreclosures are increasing but before I embark I always prepare in every way. Those of you doing this may want to look very carefully and look at Ca Code 1695....you can get this by gong to Ca Gov site and looking up the Civil Code there......read the WHOLE thing and it is seems that buying HOMES under foreclosures has to been done very careful and qualifies ONLY under very specific and restricted circumstances. Senior people care to respond ......are there other codes in other States that are like this???? I would be very careful and find out first before you do this!!!
I have cut some of it out..................
1695. (a) The Legislature finds and declares that homeowners whose residences are in foreclosure have been subjected to fraud, deception, and unfair dealing by home equity purchasers. The recent rapid escalation of home values, particularly in the urban areas, has resulted in a significant increase in home equities which are usually the greatest financial asset held by the homeowners of this state. During the time period between the commencement of foreclosure proceedings and the scheduled foreclosure sale date, homeowners in financial distress, especially the poor, elderly, and financially unsophisticated, are vulnerable to the importunities of equity purchasers who induce homeowners to sell their homes for a small fraction of their fair market values through the use of schemes which often involve oral and written misrepresentations, deceit, intimidation, and other unreasonable commercial practices. (b) The Legislature declares that it is the express policy of the state to preserve and guard the precious asset of home equity, and the social as well as the economic value of homeownership. (c) The Legislature further finds that equity purchasers have a significant impact upon the economy and well-being of this state and its local communities, and therefore the provisions of this chapter are necessary to promote the public welfare. (d) The intent and purposes of this chapter are the following: (1) To provide each homeowner with information necessary to make an informed and intelligent decision regarding the sale of his or her home to an equity purchaser; to require that the sales agreement be expressed in writing; to safeguard the public against deceit and financial hardship; to insure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equities for the homeowners of this state. (2) This chapter shall be liberally construed to effectuate this intent and to achieve these purposes. 1695.1. The following definitions apply to this chapter:
SKI
SKI,
Do the statutes define what a Home Equity Purchaser is?
I haven't taken the time you have to read the statute, so maybe you know off hand.
John $Cash$ Locke
John I was hoping that you would respond, yes they define what a home equity buyer is in the 1695 code later on in definition section: bascially if I read it correctly they have made a very broad definition of equity buyer so that it would really be hard to get around NOT being an equity buyer if you are trying to pick up the property and say use a work around solution to actually buying it per a contract of sale.......
The only strange condition that allows a buyer to buy the property is if you are buying it as your HOME not as an investment as I would or most of us here would do.
If I came across a deal of the century you can bet your BUTT I would buy it a declare it as my single family residence ....in fact I have one now that may be in that realm....this is why I am doing the code research.
My understanding is that you are in Nevada >do they have anything there in the code like what I have found here in CA???
I am currently working Utah pertty darn hard and have not really looked into what there code says YET > Utah is pretty PRO capitolistic though and it would surprise me to see this there in Utah. CA is pretty liberal and they will protect anything that moves!!!!
SKI
SKI,
No, Nevada does not have any laws like the one you have in California. I have not seen a law like this in Utah either, since I was there a few weeks ago, checking some statutes because someone there in Utah ask me some questions similiar to yours.
The reason I asked for a definition is normally they break it down what they mean, for instance a Real Estate Broker is defined in almost every state as what they can and cant do.
This would be a tough call, I imagine if you do it once you would not be considered a Home Equity Purchaser, but if you did it several times then I would imagine you might fall into that category if for no other reason than this would be considered he does it as a living, thereby falling into that category.
Maybe one of the attorney's who post here might have a better answer, this is just what I feel may happen.
Or my ultimate answer if it walks like a duck, quacks like a duck, then guess what it is a Home Equity Purchaser.
John $Cash$ Locke
The interesting thing is that people are running around here in CA subject tos and other things to buy property from the owner before the trustee sale....I think they are running a risk so me I would not go there.
Are you pretty certain that Utah does not have a code like this?? I am working Utah right now and do not want to violate any laws > I quess I should just go to thier state codes and look > my next step.
Thanks for the reply John.
SKI
How could you be a home equity purchaser when your buying the home through a Short Sale(SS) for Fair market value(FMV) according to the Broker price opinion(BPO)? Discounted off what is owed, but still FMV....
Tim
Sorry if it was confusing with the acronyms.[ Edited by bgn2fsh on Date 07/20/2003 ]
Well if there was a YoY and then with a HOD with a BS and YES and of course then maybe a GD could occur well yes.
But then a FF might do it or KK with a HUS
Watch out for the JK then.
Did you get that!!!!
WANT to speak English here
SKI
Well, the way I see the Code in CA doesn't want investor making money. But it's alright for the Auctioneer company to make money. Because if they auction the property, it's became devaluate the price of the property anyway (never in auction's history people pay full value of market price) And come to worst perhaps the owner has to pay more money they owed to the lender. At least, with investor is buying the house. they can preserve the owner good credit and the owner get some money to live some where else.
There has clearly been a abuse with short sales and also subject tos in CA I have pulled up 3 cases already where the homeowners were literally srewed by investors.
Welcome to the good ole USA!!
SKI
You can do short sales in CA.
Look at code again ....
Sales and Purchase agreement has to be in writing, with a certain Font size and have certain language included.
Need to give the seller a cooling period of midnight of the 5th business day from signing the agreement. However, if the agreement is signed less than 5 business days before the Trustee sale, then the cooling off period expires at 8 AM on the morning of the Trustee sale.
It's going to take at least 5 days for the Mortgage company to accept the short sale.
Hope This Helps!
Mrs. Meltzer
Isnt this the CYA (cover your a..) letter that I hear about. I am in Georgia and we have a standard letter to give to the seller telling them what you are doing, and thier liabilities. Like thier tax consequence etc, and the bank is the one actually setting the value for short sale.
On subject to that is a different matter, I was just told not to be a real estate agent because you open yourself up to a lot more liability. As far as the price you try to be somewhat fair, and not really screw the person as bad as you can. If you just try to make a profit, and not a killing the law should not bother you.
At least that is my opinion.