- This topic has 30 replies, 7 voices, and was last updated 16 years, 10 months ago by
no_such_reality.
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June 21, 2007 at 9:33 AM #60969June 21, 2007 at 9:33 AM #61006
PD
ParticipantPerry, I think you’re right. I hear a lot of talk about how the nice areas will hold up because the people living there have money. However, many of those people have businesses that could fall on hard times. I know of a family in Coronado who has their house (long time owner) for sale because their business is going through rough times (just one instance, I know, but could be part of a larger trend).
Further, it seems that many business owners have been using the equity in their homes to keep their businesses going. A drop in value will cut that short.
June 21, 2007 at 10:20 AM #60991no_such_reality
ParticipantTwo thoughts cross my mind on it.
since they’ve provided a 1/8th interest, how does that affect the sale if they get it sold? Does the escrow need to forward the 1/8th proceeds to the bankrupt entity? Why not just provide a 1% interest?
Second thought, is the loan an original purchase loan? If not and the lender has recourse, I would think they’re legal department would stomp all over it to squash the behavior in the general public.
June 21, 2007 at 10:20 AM #61028ParticipantTwo thoughts cross my mind on it.
since they’ve provided a 1/8th interest, how does that affect the sale if they get it sold? Does the escrow need to forward the 1/8th proceeds to the bankrupt entity? Why not just provide a 1% interest?
Second thought, is the loan an original purchase loan? If not and the lender has recourse, I would think they’re legal department would stomp all over it to squash the behavior in the general public.
June 21, 2007 at 10:39 AM #60999sdrealtor
ParticipantFYI, when I ran into the example in Encinitas Ranch I did a Title Search on the entity they transferred title to. I found several dozen others many of which were in lower income South Bay areas. I think this proves it is not just a strategy for the wealthy. It could easily be at the other end of a 1-800 # posted on one of those “ugly yellow signs” you see on freeway offramps ofering foreclosure relief.
June 21, 2007 at 10:39 AM #61036ParticipantFYI, when I ran into the example in Encinitas Ranch I did a Title Search on the entity they transferred title to. I found several dozen others many of which were in lower income South Bay areas. I think this proves it is not just a strategy for the wealthy. It could easily be at the other end of a 1-800 # posted on one of those “ugly yellow signs” you see on freeway offramps ofering foreclosure relief.
June 21, 2007 at 11:02 AM #61013SD Realtor
Participantsdr you are right… it could be the strategy used by any and everyone…
nsr – I do not believe the home will ever be sold so they most likely do not sweat it. As for the percentage of how they split the interests, again, it is something I just learned about so I don’t have an answer but I agree with your premise, why not just use 1%…
As far as the loan, there is a first and a second. The NOD and NOT were for the original purchase yes.
SD Realtor
June 21, 2007 at 11:02 AM #61050Participantsdr you are right… it could be the strategy used by any and everyone…
nsr – I do not believe the home will ever be sold so they most likely do not sweat it. As for the percentage of how they split the interests, again, it is something I just learned about so I don’t have an answer but I agree with your premise, why not just use 1%…
As far as the loan, there is a first and a second. The NOD and NOT were for the original purchase yes.
SD Realtor
June 21, 2007 at 11:30 AM #61023patb
Participantit’s not Fraud.
It’s Barratry.
You can’t transfer the same 1/8 to a different company, but, you
can transfer 1/8th into 8 different companies.each one files bankruptcy in term.
Now, what the bank can do to short circuit this.
Sell the mortgage to an LLC. Bankrupt the LLC,
this forces all the shells to come to Bankruptcy court
the Judge then says the only asset of this LLC is the mortgage on a
defaulted property, i order this property sold the bankruptcy court
does the sale, bypasses the shells, forces them into unsecured status
and the LLC gets the whatever it can get from the sale and
pays it’s debts to the Bank.Jeez, I should be a lawyer
June 21, 2007 at 11:30 AM #61060Participantit’s not Fraud.
It’s Barratry.
You can’t transfer the same 1/8 to a different company, but, you
can transfer 1/8th into 8 different companies.each one files bankruptcy in term.
Now, what the bank can do to short circuit this.
Sell the mortgage to an LLC. Bankrupt the LLC,
this forces all the shells to come to Bankruptcy court
the Judge then says the only asset of this LLC is the mortgage on a
defaulted property, i order this property sold the bankruptcy court
does the sale, bypasses the shells, forces them into unsecured status
and the LLC gets the whatever it can get from the sale and
pays it’s debts to the Bank.Jeez, I should be a lawyer
June 21, 2007 at 11:35 AM #61025Participantpatb, getting the relief of stay and then an IM REM seems to be alot less work then what you specified. The title officer told me this is what the lenders always do.
SD Realtor
June 21, 2007 at 11:35 AM #61062Participantpatb, getting the relief of stay and then an IM REM seems to be alot less work then what you specified. The title officer told me this is what the lenders always do.
SD Realtor
June 21, 2007 at 11:53 AM #61035PerryChase
ParticipantI’ve reviewed financial statements of enough small companies to know that they are generally cycle dependent. Banks usually don’t lend to small companies without personal guarantees.
In the 1990s, the foreclosures in the “superior” areas were in large part due to small business failures. The S&Ls were going under and cutting off credit.
It’s going to be different, but the same, this time around.
June 21, 2007 at 11:53 AM #61073ParticipantI’ve reviewed financial statements of enough small companies to know that they are generally cycle dependent. Banks usually don’t lend to small companies without personal guarantees.
In the 1990s, the foreclosures in the “superior” areas were in large part due to small business failures. The S&Ls were going under and cutting off credit.
It’s going to be different, but the same, this time around.
June 21, 2007 at 1:21 PM #61083Participantit’s not Fraud.
It’s Barratry.
No, I think it’s fraudulent.
Barratry is filing chronic frivalous lawsuits. Fraud is a deception for gain. This falls under a deception of a non-market transaction to gain the advantage of delaying contract execution.
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