Is A Lender Allowed To Deceive An Investor??
I hope somebody here can help me - I'm working on my first subject-to deal in California and I am totally stumped!
During the foreclosure process, is it possible for a 2nd lien holder to redeem the 1st and then call the whole thing due and NOT allow the owner to cure the foreclosure?
In this case, I am trying to acquire a property from an Investor who has an agreement with the Owner. The problem is that the sale is in 7 days and the Investor doesn't know what to do.
He was told by the 2nd note holder - Countrywide - that they have redeemed the 1st and now they will not allow the loan to be cured and that it has to be paid off. They are not willing to do a short sale and they are sticking to their price.
The lender says that they will just let it go to sale if the loans are not paid off.
Can they really do that?
I believe that's correct. Generally there's a time when the lenders will let you bring the loan current. Some will let you do this right up to the sale. I believe that they can simply call the loan due in the latter stages , and require the loan balance to be paid in full.[ Edited by jeff12002 on Date 12/30/2003 ]
Thanks for your quick reply Jeff!
At the risk of repeating myself and sounding like someone who can't accept an the answer the first time...
Isn't the homeowner in default allowed by law to bring the loans current at anytime before the sale (in California)?
It just seems that if the lenders were allowed to decide whether or not a default can be cured, wouldn't they choose the option of kicking the owner to the curb more often than not?
Thanks...
My belief, in years past, Homeowner can bring current until Notice of Sale published, then lender has to accept payoff, but doesn't have to allow reinstatement. I think law has changed, but not sure, that allows Homeowner to reinstate up to sale.
There are people on this site that know for sure.
In this case ,since you didn't state otherwise, the second lender bought the 1st mtg and reserved the right to continue the original foreclosure.
The answer to your question is found in the Trust .Deed document. Read it. My gut feeling is that Countrywide knows what they're doing and are within their rights.. [ Edited by sammyvegas on Date 12/30/2003 ]
Happy New Year!
Thank you all SO much for your replies. Your information has been very helpful - The Creative Investor rocks!
Is anyone interested in taling a look at this CA Sierra Foothills subject-to deal?
Big problem is that the sale is scheduled for Monday (1/5) - so it is actually 1 minute to midnight for this owner and may already be too late.
I have an idea of how to work this one even at this late hour but it could just be crazy-new-investor-voices in my head, lol.
The investor I've been talking to says he has the property under contract (in trust) and power of attorney. I think that I am the only dog barking up this tree - I'd like to buy this place to live in - and I just found out about it a couple of days ago.
It's a little involved but the Investor will assign his beneficiary interest for $5,000 (down from $10,000 2 days ago). Full re-instatement (according to him) is $4893 which includes the Jan payments. Payments are about $1500/mo.
But if I understand what Bobfordd said, we are already WITHIN 5 days from the sale. This guy could just be trying to get $5K from me knowing that as soon as I buy subject-to, the lender is going to call the loan due in full.
What do ya'll think?
Thanks in advance for any advice or comments.
Check my profile for contact info...
Sometimes the best deal one can make is the one that doesnt get done. This deal really sounds shaky. And the time is getting to be too short to check things out. So, just maybe time to check out of that deal
I really enjoyed all of your postings, it is a bit confusing. What you are all looking at is once again the letter of the law and business as it is practiced by some of our larger lenders. Country Wide being prime. They do walk on occasion with a large swagger and play the Bully part.
Frankly most foreclosures can be stopped and negotiated one day prior to sale. But to do this you must employ the proper weaponry.
For example you contact in house atty for Countrywide. He will advise you of that very special atty they think is the best. Don't ask too closely about the underlying connections.
You employ him to represent all parties. He arranges the reinstatement, he makes the agreement that you will refinance everybody out within 30 days of perfection of title. And you do. Now you have the track record, you know who are the players and you deal with them every time you find that nice Countrywide riding a second, or a lst and second or a lst with a John Doe Second arranged by their Mortgage Broker who just happens to do a lot of them and for them.
Its a game, you have to get into the play by knowing the entangled webs of those who play the game and on both sides.
There are persons who in this town, merely pick up the phone, Call the REO officer by his first name, remark on that hole in one he made (with the assistance of his caddy. you know the one who has a hole in his pocket where he drops your ball, stands over the cup, it falls in. Hole in One.)
In the area of your interest, start your contacts. List the most active Trustees, get to know them. Make a point of social contact with REO's Loan Service Reps, etc. If you wish to manipulate these persons for your interest, you must get close. Keep your friends close, but your enemies and business acquaints even closer.
It is a very profitable business when played at the higher levels. But you must know the game and and and the players.
Respectfully Lucius