What Are The Different Ways To Halt A Foreclosure At The Last Minute?
Anyone here working the preforeclosure market knows that most distressed homeowners tend to call at the absolute last minute, very often the actual day before the courthouse sale!
We used to tell the last minute callers that its now too late and there is nothing we can do for them because they waited too long. Also mentioning that they can go to Office Depot, pick up a personal self-bankruptcy kit and file themselves to see if they could buy more time.
However I recently went to a seminar where the speaker mentioned he's able to postpone foreclosures even as late as the day before the auction, and he often has to do this because 'everyone' waits too long. I didn't buy the bootcamp & materials though so I dont know what strategies he was using...
anyone? anyone?
por favor compadres please help!! the calls are about to start coming in again next week!
i can imagine every month i'm throwing away some good leads, because i just tell everyone its too late
what if i just fax in a purchase & sale agreement, will it still work a day or two before the auction? or perhaps requesting a short sale package - what if i cant get a hold of someone in loss mit before the end of the business day .. o heck i guess i just need to go do it and experience everything firsthand
Depending on the situation and if you can get to someone that actually can stop the foreclosure, you may have luck in delaying it. You'll likely need to fax over a net sheet and deal from there. It is all in presentation. GOOD LUCK
There is only one sure fire way to stop the foreclosure for and that is to help the homeowner file an emergency petition for Chapter 13 bankruptcy. The emergency petition is much smaller than the entire Chapter 13 Bankruptcy package. If you go to your local Federal Courthouse you can pick up the necessary papers. As long as you file the proper paperwork with the intake cleark at the Federal Courthouse and get a case number and time stamp , the sale will be stopped. You can literally file the BK paperwork five minutes before the sale, and even if the sale takes place it will be invalidated if you have the bankruptcy case number with a time stamp prior to the sale.
Once you have stopped the sale you have approximately 2 weeks to file the remaining bankruptcy paperwork. This will not be necessary because in this time you will have given yourself enough time to put your deal together. One thing to remember is you cannot buy a property that is under Bankruptcy protection without the court trustee giving you approval. That is way I have the owner file a voluntary dismissal of their case about three days after the intial filing. The judge then okays the dismissal and once the case is officially closed you can open escrow and close the deal without the court interfering.
-Doug
that is exactly what some have been looking for great info
I think I like the concept of the BK petition. Especially if you have a deed in your pocket to keep them moving. I think that if you filled the discharge at the same time it would help as well.
The easiest way I know to stop a foreclosure is to have the cash to make up the back payments.
I think Chapter 13 is a good way to buy more time. Which implies that you have already started your process and everyone is moving together but you ran out of time. I would not start a process with someone who now needs a Chapter 13 just to get started. We had a bankruptcy lawyer speak to our sub-group and he said that if someone waits until the day before or the day of the sale to call his office he charges 3x more. Not that he does more work, but his experience is that they never follow through with the other required steps and it is a waste of his time. They are flakes.
So if your SS just needs a little more time to get the funding, then think about Chapter 13. But if someone calls you the day before the sale, I would not waste my time because it probably will not work out.
Brenda
You may want to go down to your local courthouse and walk yourself thrpough the procedure and the forms, as if you are filing them for real. Then when you describe it to your lead, you'll know the exact deatils of where they need to go, who they need to see (title and name, if one steady person takes care of the emergency chpater 13s for your courthouse.) By knowing these details, you will inspire confidence in your lead, and have a foot in the door for when you try to negotiate your next step.
You may also consider the generous approach - offering to meet them down at the courthouse and walking them through the process. That usually wins big points, especially if people at the courthouse recognize you as someone who helps others.
Marlene
great info dfresh
thanks
Quote:
On 2004-03-31 11:14, MarleneM wrote:
You may want to go down to your local courthouse and walk yourself thrpough the procedure and the forms, as if you are filing them for real. Then when you describe it to your lead, you'll know the exact deatils of where they need to go, who they need to see (title and name, if one steady person takes care of the emergency chpater 13s for your courthouse.) By knowing these details, you will inspire confidence in your lead, and have a foot in the door for when you try to negotiate your next step.
You may also consider the generous approach - offering to meet them down at the courthouse and walking them through the process. That usually wins big points, especially if people at the courthouse recognize you as someone who helps others.
Marlene
becareful with this kind of stuff, you dont want some plantiff's attorney catching wind of this and tipping off the state bar that you have been "practicing law without a license."
And please dont forget that the Chapter 13 bankruptcy will be on the homeowners credit for 10 years regardless of whether he acutally finishes the 13......
You better make sure the homeowner understands what they are doing... and is not be coerced by you to file - otherwise you might find yourself under investigation for BK crimes by the United States Trustee's Office and the DOJ.
Of course you all realize that any person familiar with filing a pleading should be able to restrain a sale. Just a matter of the Court Order and communicating same to the Trustee. To restrain there are many reasons, some of which may actualy be applicable. Chap 13 is also an easy way to go and as long as you withdraw prior to first creditor meeting you should be ok.
Of course if you have a relationship with the Trustee there are other ways of stopping the sale.
I am sure you are all familiar with the night search prior to any sale that the title company conduct as remember they are the ones that have to insure the Trustees Deed on sale. Supose someone filed a timely restriction of some sort just as the Recorders Wicket closed down the night before. The Title Co. night search pick it up. What will they do? Call the Trustee, ask him to postpone until they can get a handle on the instrument that has caused the problem. Maybe a Wild Trust Deed or a Quit Claim dated back in time and just recorded. Maybe evidence of some strange convayance. My favorite was the recording of what purported to be a full reconvayance of the Trust Deed then in foreclosure. You think that does not cause a small conflagation? There are many others we are not dealing with an exact science. But you all get the picture. Oh I almost forgot the jiggled legal description and the missed Assessors numbers etc. etc. etc. If you know all of these little things, you can stall the sale.
Now comes the good part, having done this just what action should you then take. Perhaps have the owner sign a Quit Claim Deed cause all is lost. Or if you are an attorney you now increased your fees as if you were dealing with a major rapist who specialized in attacking duly elected officials. Or what is even more fun cause a Mell of Title and I am sure you all know how to do that. Naturaly if you did that you would stick in a lien, or a notice of intent to lien. If the mell takes effect there is only one thing they can do and that is pay off the lien. There is no longer a proper foreclosure to remove a very junior lien.
In England prior to the Second World War, there was a series of title snags created by a group of con men who went around inserting wild deeds etc. For a fee they would remove them. Made a very good living on it for about five years.
Of course by that time they had all been admited to the bar and were in practice. All were of course Soliciters but one believe it or not was a Barrister. Go figure.
Enjoy, Lucius 8-) 8-)
please dont think I am an idiot but ! what is meant by causing a mell of title ?
A mell of title is caused when the Deed of Trust owned by Mr. Joseph Zilch is suddenly foreclosing on the Trustor who owns the property and his name is Joseph Zilch. The entities are as of one.
Supose you wish to get rid of an obligation a loan for $300,000 which is secured by a second Trust Deed. Your name is Joseph Zilch and that second for $300,000 is held by your ex wife. The Ex Mrs. Zilch. You sneecky person go buy the lst Trust Deed which has a balance due on it of $500,000 and you purchase this loan in your own name. You start to foreclose that Trust Deed for $500,000 making the assumption that you would on a successful foreclosure wipe out that junior lien held by your ex wife for $300,000. Smart move, easy way to get off the debt for $300,000. Well the day the sale was held and you then cut a Trustees Deed on Sale to yourself you would have mell'd the title. The Ex wife's junior lien would not be eliminated it would now be secure and would have dropped down into first position.
Hoisted on your own Petard.
Lucius
l 8-) 8-)
DFresh
Lets say I guide the homeowner in filing an emergency petition ch.13 the day before the sale, and then had them rescind the petition a day or two after the scheduled sale date- technically would this delay the courthouse sale to the next first Tuesday of the next month? (or whatever applies to your state)
If the additional bankruptcy paperwork is not filed in the alloted 2 weeks AND I still haven't finished putting the deal together OR I discover its not worth a deal (because of expensive back liens, structural problems, etc.) then what happens? House reverts back into next upcoming auction?
What you mentioned about "voluntary dismissal" 3 days after filing, I assume this means the same thing as rescinding the bankruptcy? Will this show up on homeowners credit record?
I personally like working on pre-foreclosures in the last 4 weeks before the Auction. It's been very rewarding until now.
We closed on a house 2 weeks ago where the owner had been in coma/intensive care for 5 months. She called 2 days before the Sheriff's sale.
The Attorney of my HML recommended a different approach.
We drew up a sales contract and added a Proof Of Funds Letter for the Owner.
The Homeowner went to the Judge's office, explained that she had a shut and dried way to avoid foreclosure, and got the Judge to approve a 30 day extension.
And we closed with plenty of time left.
As I'm writing this I'm preparing a similar package for another case that does not have the emotional baggage of the previous one, where the auction date is next Tuesday.
Seems to me that if the homeowner can present a clearcut case of an honest solution to avoid the foreclosure, the Judge might once again be willing to extend a 30 day period...at least I'm certainly willing to give it a try.
If this works again, it'll be a clean, straightforward way we can add to our arsenal of tools in these situations.
Hope this helps.
:-D
[addsig]
I like your state of Florida, you have some justices on the bench that are worth their wait in gold. God I wish I had them here.
I tried what you did and I thought it was well represented and in the interest of all parties it was the correct way to go. Avoided a hurt on any party. But the dear old man turned a deaf ear, stated that he was incensed by the continual attempts at delay and he would not act in the matter.
I made a full tender about one half hour prior to sale date. I used the threat that I would have the sale set aside and more then that I would cry with great intensity if they did not accept full tender. They did, of course the offer to kill the Trustee was helpful. I often wonder if the property owner was just kidding. He did belong to a rather unruly gang who actualy came up with the money to pay off the encumbrance.
Different strokes for different folks.
Lucius 8-) 8-)
If one files for bankruptcy either ch. 7 or 13 the day before the sale, then rescinds it a couple of weeks later, will this negatively effect their credit? So now they will have a foreclosure AND a bankruptcy on their report?
Quote:
On 2004-04-05 14:26, telebroker wrote:
If one files for bankruptcy either ch. 7 or 13 the day before the sale, then rescinds it a couple of weeks later, will this negatively effect their credit? So now they will have a foreclosure AND a bankruptcy on their report?
YES, YES, YES.
This can be devastating to their credit!
Their is no such thing as "Rescinding" bankruptcy. Cases can only be dismissed or discharged.
Dictionary states rescind to mean "To make void; repeal or annul." Couldn't this be considered the same thing as "dismissed or discharged" ?
I'm confused, shouldnt this not show up on a credit report if it was discharged before the filing completion?
[ Edited by telebroker on Date 04/05/2004 ][ Edited by telebroker on Date 04/05/2004 ]
No.
It will be on their credit from the day it was filed. period. no turning back.
Even if the case is dismissed 30 days later (for not showing up to the 341 meeting, or for not filing statements and schedules or for a general failure to prosecute the case.)
Once again, there is no way to "take back" or "rescind" or otherwise erase the bankruptcy filing. Sure, the case can be dismissed, but one cannot go back and undue the public record filing which will be on the filers credit for 10 years.
clear?