Quit Claiming With A Lien
I purchased a couple of investment properties last year and instantly fell victim to an illegal pratice called property flipping. Basically, I was duped as a first time property owner into believing the grossly exagerated appraissals. The foreclosure process was actually inititated then canceled. I don't know what steps Nat City will take next, but my question is this: I want these properties out of my life, can I quit claim deed the properties even though there is an outstanding lien? The lien follows me and not the property, right? Its seems like the bank is going to do a charge off anyways, and my credit is going to be jacked no matter what so I might as well make off with a few thousand in my pocket for all my worries. Please enlighten me
what state your in.
If the "grossly exaggerated appraisals" were done by a licensed appraiser, you might have some recourse there--if they were in fact grossly exaggerated.
Also, while I believe you could have been duped by someone of questionable morals, I'm wondering where you got the idea that flipping properties is illegal?
Djones6206,
Glad to meet you.
From a laymans standpoint I would think you have legal recourse if in fact this was the illegal practice of flipping in the sense the government uses this term to describe fraudulent acts.
I will move your post to the legal forum, to see if this will get you some help.
Welcome on board this board, this is the first time I have seen someone actually post about this topic, sorry it had to be you.
John $Cash$ Locke
While you sure may have been the victim of an unscrupulous appraiser and his inflated appr'l, I'd urge some careful study before you just toss the properties...if you could even do so.
QC Deed? Probably NOT your solution, because NO deed is a "unilateral" (one sided) deal. That is, it takes 2 to tango, and just because you might want to give it, the grantee might be unwilling to accept it, and without their willing acceptance it would be a meaningless gesture on your part.
After all, can you force anybody to take a gift? Hardly!
If I were you, I'd look around your local REI group, many of which now exist around the country, and find some old hand (maybe only age 25, but rich in experience) and get some 1 on 1, over a "cuppa", mentoring/advising.
What looks like an ugly, insoluble mess to you, might look a lot different to some person trying to break into REI world, and it could be you might easily just "wrap" your loans, having a new taker just take over your payments.
A Wrap is a simple process, where you continue to make your payments on your loans, but YOUR new buyer then agrees to make a monthly payment to you, equalling or exceeding YOUR payment, so you simply take your buyer's check, cash it, then send in your payment.
Big advantage doing this is your lender does not know you've sold the property, because you have NOT yet given a deed, but "sold on contract", which is not recorded, not on record anywhere except between you & your buyer.
If your lender DID know you've sold, then it might exercise its DOS and call the loans. I think you probably don't really want that.
Then, if your buyer works out, and maybe agrees to "balloon" out his debt to you, in 2-5 years, and goes and gets a new loan, you then cash out your loan, simultaneously giving your buyer a Deed at that time.
Now, I sure do NOT suggest you try to, in any way, l deceive YOUR buyer. So, with the help of your mentor/advisor, totally and openly divulge & disclose any & all property problems, etc. to your buyer.
On the value issue, you might want to include a written clause to the effect that you are NOT, in any way, warranting the market value of the RE to be any certain number, as you're not sure yourself, and it's totally up to the buyer to determine value, to him. And he's NOT relying on anything you've said or represented as to its market value.
Finally, just remember that one of the big features of REI that makes it work, is it's an "imperfect" market, where NO one knows an absolute value on any RE.
Unlike cars, for example, where there's a Bluebook, that's more or less followed throughout the USA, there's really no such thing with Re, and (as you've seen) two different appraisals can show wildly differing market values.
What looks like junk to one guy, looks like opportunity to the next. This is what makes REI tick!
Good luck to you, and chalk this one up to experience. After all, think how many times Babe Ruth swung his bat, or how many baskets Babe Didrickson Zaharias tried before mastering basket ball.
You win some, lose some, and none of the greats does it without lots of trying.[ Edited by JohnMerchant on Date 08/15/2003 ]
Where are you located?
Please post your email address & I maybe able to assist you.
sha
Well, I'm back up and running! That's right folks, I made the history books as I have taken part of the great Blackout of 2003.
Well, to answer the first question. I am from the State of Michigan in the City of Detroit.
Perhaps I should expand upon the story a bit. Last year I was approached by an investor who suggested I get into real estate investing. Now, keep in mind that I was very naive and I have learned so much this past year. So many things I should've known before to closing, I know now.
Now, this investor, obviously has co-conspirators he uses to fashion these deals. The appraiser was licensed by the State. The mortgage broker, The Home Loan Center LLC, is also licensed by the State. I think even the title company was in on it.
I let my guard down big time because I figured that since all these players were licensed and regulated, I should have no problems. I assumed that since the broker wasn't actually financing the loans (Nat City and PCFS were) the lenders would make damn sure their interest were protected, perhaps by doing their own appraissals. Well, I was wrong.
I quickly realized that the $70K and $55K houses were worth about only $20K a piece. I began to research after I replaced a roof for $5,000!
I then ran across the term "property flipping" while on the net, which you guys are right, is not a crime in its own right, but, add fraud to the mix, and you have a federal offense on your hands.
I know the properties are worth only $20K because I did a deed search on the Waynecounty web sight. Only 4 months earlier were the properties sold to the investor I bought the house from. Apparently, he made no substantial repairs, just cosmetic cover ups.
I stopped making payments in March and was instantly contacted by both National City and PCFS on a daily basis. I also contacted the State of Michigan's division that licenses both the broker and appraiser and they are slowing investigating. I also contacted the FBI of Detroit and they are slowly investigating as well.
What's also interesting is National City began the foreclosure process in June, but cancelled the foreclosure. I talked with their legal department, but they don't know what they going to do next. Interestingly, nobody has denied that I've been scammed, which I guess means I'll just have to be patient.
What's also interesting is that PCFS has NEVER sent me anything that mentions foreclosure. Now, remember, I stopped payments in March and they kept calling all the way till the end of May, but since then, no letters, no calls, no nothing! Think I'm gonna call em to remind them? No, uh, uh.
I even tried selling the homes to break even, but I'm so upside down that I don't think its an option for me. And to top it off I was paying a high 9-10% rate. I tried re-financing and everything, but to no avail. I have no money to put into the properties.
So, that's when I figured perhaps I can give em away for say $5,000 a piece, of course explaining all the risk to the potentional buyer. And, I could at least have money to cover my losses, hire a laywer, and sue these a-holes!
Perhaps whomever I sold it to could quickly QCD it to sombody else for say, another $5K? Or fix it up and sell it.
My understanding is that the only time my buyer could lose out is if the lender decided to re-initiate the foreclosure, and at $10-$15K in fees, wouldn't it be better for the lender to just do a charge off and write it off as a loss on their books. Or better yet, couldn't they use that $15K to sue the mortgage broker for the full loan plus fees? And hell, who knows when PCFS is gonna wake up.
Well, sorry for all the detail folks, but I hope I cleared every thing up. thanks for all your replies. Keep em coming. I think I will look for an REI group to give me more guidance.
Fell free to contact me,sg2576, or any body else. My e-mail address is **Please See My Profile**