Seller In Federal Prison
Ok heres a new one. I've got a guy being foreclosed for the unusual reason that he's incarcerated in the Federal pen and cannot make his mortgage payment. Looks like there could be a lot of equity (perhaps $100,000) here though. He just wants to walk and avoid any defficiency judgement maybe keep the foreclosure off his credit report (Yeah, I know, Hard to believe that a guy with a federal felony on his rap sheet is worried about his credit report).
Anyway, is there any reason I shouldn't let him quit-claim his property to me? Is the Department of Justice going to come knocking at my door asking why I'm doing business with criminal types?
Anybody ever do a deal like this? Any negative repercussions? I wish Lucius were around-- but we haven't seen him in a week or more-- Bet he's got a dozen stories for this one.
[ Edited by commercialking on Date 05/12/2004 ]
According to the RE agent course I am in the middle of (yes I am going to swing both ways
There is generally no problem entering into a contract or receiving property from a felon. Get the quick claim and then do w prelim title on it and record the deed based on what you find.
Randall
[addsig]
I think this law is still in place: if the property he owned was acquired by illegal funds (eg. drug money) then the gov't can seize it. I do believe they could do this in the middle of your deal, I'm not sure if they can do that afterwards. It doesn't hurt to double check with a criminal lawyer on what the seller's rights are in this case.
I think the government would've seized the property by now if it was acquired with illegal funds. Have him quitclaim it to you, and see if you can immediately resell it without putting money into it. If you can sell it and get a new title policy issued, it becomes the title company's problem, not yours. If not, you quitclaim it back to him.