So I bought a HOA lien in NV and...........
There is a first for $160k and the house is worth $220k. I spent $5,600 at auction on the HOA. I bought it planning on paying off the first. Deed is en route to me. My title company wont talk to me about it. They don't insure HOA foreclosures, which I knew. Although they did say that if I owned it for 6 months to a year and no one came out of the woodwork -that they would talk to me then about insurance. I found out that the person on the deed died a year ago. The first is not in default.(which is strange to me) I cannot find a reconveyance for it. Last April the DOT was assigned to US Bank Home Mortgage and the owners signature was not on the document(because he is dead?) What I believe happened is that his son inherited the property and has been paying the note while he figures out what to do with it. the house has been for sale since 2009 until last January as a conventional sale. The listing was removed in January and the power and water shut off and the liens began piling up. I cant figure out who has been paying the mortgage since the guy died. I am in the business of flipping houses not so much renting them out. Questions: 1. Do I hire a lawyer and start a quiet title action so I can sell the property soon? 2. Do I contact the US Bank after I record the deed and find out info on the DOT and pay it off? - Can I negotiate with the bank for a lower payoff? 3. If I let the first go to auction and buy it, will that wreck my credit?(it is vested in an LLC) 4. Can I sell the property quickly and just pay the 1st DOT through escrow? - would a title company insure that at the sale? 5. Does anyone buy properties without getting title insurance?(I know I do all the time, but that's at auction) 6. Are there any weird laws about what happens when a homeowner dies who owes money to a mortgage?(county records show nothing pertaining to his death or probate) 7. Is there some chance that the DOT has been paid and not recorded properly? 8. Should I just rent it out for a year or two and let the dust settle? (I sure wouldn't want some disgruntled Son who inherited it showing up at the door with renters in it) Any help on this would be greatly appreciated. I've been flipping auction houses for 2 years with a great success rate but am new to this HOA foreclosure thing. -TS
Posted by tom
Answered by miket
Mon Dec 3rd 2012 at 3:15pm
Answered by tom
Mon Dec 3rd 2012 at 3:48pm
Answered by miket
Mon Dec 3rd 2012 at 6:46pm
You Own That House Free & Clear But Wont Have Marketable Title Until The Relatively Recent Court Cases To Remove The First Deed Of Trust Are Settled (About Three Years) So Rent It Until You have Marketable Title Which You Don't Have now. & Don't Worry About The First. They Wouldn't Talk To You Aways! A Couple Things To Worry About When Wiping Out The First.
1. The Judges Don't Like IT! & therefore are hesitant to enforce the law as written. There are at lest 20 cases making their way through the court to deal with this that will Ultimately be a Supreme court decision. So you need to simply rent the property and wait for these cases to play out and you will likely own the property with marketable title free & clear in the next 2 or 3 years! There is Always a chance the Supreme Court goes the other way but the law is pretty strong here. Which brings Us to Point
2. For everyone out there reading this and calling B.S. Here is the written decision from the State of Nevada Interpreting The Law that elicits so much confidence that this is the correct outcome.
Good Luck Rent It For The Next Three Years While This Is Hashed Out In Court!
Answered by Steve Cantano
Sun Mar 3rd 2013 at 10:33pm
Conclusion: US Bank knocked off $50k from the principle. Ended up making $80k on the property. The whole thing took a year, and was super stressful.
What I learned: If the bank settles, then you get a recon and the title co is happy, and you sell the house. If they don't settle then you either get a default judgement which the title co doesn't like, or you find yourself stuck in a really expensive court case which could end up in federal or even supreme court. The bank's lawyers often try and drag out these things in order to bill for as many hours as they can. I feel as though last year was the magic year for doing the HOA quiet title thing. I have stopped buying them this year because I got stuck in one where the bank wouldn't settle and the the defense council removed the case to federal court which raised the lawyer's workload exponentially, and I ended up losing money on one. In addition to all of that, there are more people gobbling up all of the HOA's at auction, and bidding them way up. These people are mostly putting renters in and banking on a favorable supreme court ruling on HOA foreclosures. I don't want to be a landlord with dozens of houses in various stages of foreclosure. I just want to flip houses and move on.
Answered by tom
Fri Jul 11th 2014 at 4:05pm