Posted by Keith (OH) on April 21, 2006 at 17:36:34:
Todd,
Thanks for the explanation. I was beginning to pack my bags and come visit your state for some tax deals !!
Keith
30k Lien on Land Home I bought for $100 - Posted by Blake ID
Posted by Blake ID on April 21, 2006 at 03:33:23:
I bought a single wide with land about a month ago. The MH was going to auctioned for back taxes $180 +/- and the land was 3 years behind in taxes (about $1500) The seller was an older lady whos name and adress I found on the tax records. I went to see her and she said “I’m just going to let it go.” I gave her $100 and closed it with a title company leaving the lien on there and bringing last years taxes current.
It’s kind of a mess. The 30k Lien is in her name and she hasn’t paid on it in 3 years+. The finance company has written it off. What’s the best way to go about getting the title cleared up. How should I go about contacting the finance company if that’s the best option?
The Good News is I lease optioned it to someone with 1k and then $500/mo at $55,000 so it’s basically free money since i’m not paying a mortgage.
Any help or just a push in the right direction in getting the title cleared is appreciated. Thanks -Blake
Re: 30k Lien on Land Home I bought for $100 - Posted by Tony Colella
Posted by Tony Colella on April 21, 2006 at 11:35:57:
Like the others that posted, I have some reservations about the $30k Lien.
If I read your post right, the title company and you did get the taxes current at closing which stopped the sale (but checking yourself to be certain what’s in that file at court would not be a bad idea as suggested).
But unless the lender with the $30k lien released the lien or the title company insured against it (though I cannot imagine why the would), the lien is still there and essentially you bought the property subject to that lien.
Should they foreclose, you might not personally be liable for the money but they could take your property. Worse you have contacted to sell that property to someone else but may not have clear title to it.
Your buyers (eventual) lender or whomever the sell to who uses a lender will discover the lien and this property could come back to haunt you years from now.
If your buyer found bank financing to buy you out, their title search would see the lien and the bank would pay it off or not lend. This would not kill your deal but it would impact your profit a good deal.
You might seek a short sale from the lien holder to clear title to the property.
Tony
Re: 30k Lien on Land Home I bought for $100 - Posted by Keith (OH)
Posted by Keith (OH) on April 21, 2006 at 10:02:29:
Blake,
Sounds like an interesting deal.
What exactly did you buy for $100 and what is the lien on ? The land, the home or both ?
I am surprised that a title company would transfer title or deed without clearing the lien or getting written permission from the lienholder to approve the transfer.
Depending on how this is structured you are going to have to contact the finance company to clear the lien. The sooner the better. If the the lein is on the land I suspect the finance company will eventually start a foreclosure proceeding to recover some of thier losses. That might put you in an undesirable situation.
Keep us posted,
Keith
Re: 30k Lien on Land Home I bought for $100 - Posted by Todd (AZ)
Posted by Todd (AZ) on April 21, 2006 at 09:43:01:
Hi Blake,
Here in Arizona it is a Tax LIEN state vs. a Tax DEED state. A tax lien is in the top/superior position of all liens (except IRS) and, after you initiate foreclosure, will WIPE OUT all other liens junior to it. Nice, huh? However, you are in Idaho (I think) and Idaho is a tax DEED state. At auction you will get the deed to the property, however, the liens go with it to and are your responsibility. Are you SURE this property still is not headed for auction even though you made this deal with her? I’d get with the county treasurer’s office there and explain, ask questions, and see where this stands. Perhaps a quick visit with an attorney in this area would help also? Wish I could give you a little more but I invest in a tax lien state, not tax deed state, so this is the best I can do. Good luck, Todd (AZ)
subject too me getting clear title - Posted by Blake ID
Posted by Blake ID on April 21, 2006 at 22:55:57:
Tony, the LO is subject to me getting clear title.
-Blake
Re: 30k Lien on Land Home I bought for $100 - Posted by Lien is on land MH
Posted by Lien is on land MH on April 21, 2006 at 22:43:47:
I bought the land from the seller for $100 and she lost the title to the mobile home so I’m requesting a copy of the title for her so she can sign it over to me. The lien is recorded on it though so I’ll have to clear it before I can register it.
About the finance company -Beneficial Mortgage. They had an office here but it went out of business (lending money and not collecting payments must be a recipe for failure). I’ve contacted them a couple times but it’s the same thing, they transfer me to 3 or 4 departments and then I’m back where I started. Then they refer me to my local office -useless. There’s very little risk of forclosure. She hasn’t made a payment for 3 1/2 years or so and They’ve written it off (whatever that means) They also don’t seem to know what I’m talking about or have any record of it which is probably why I’m transfered through the phone loop. The loan seems to have fallen through all the cracks.
I talked to a lawyer earlier this week and she said to send a letter to the finance co. and if they deny having any record I may be able to go through a process called “quiet title” which will erase the lien, otherwise I’ll have to pay them some money. I’ll let you know when something new happens. -Blake
Pretty Sure - Posted by Blake ID
Posted by Blake ID on April 21, 2006 at 22:53:39:
There are 2 elements. The Land and the MH. The land was 3 years behind but I paid 1 year so it’s now 2 years I’ll pay it off before the year is up. The MH is up for Sherifs sale, for back taxes ($180 +/-) but they can’t sell it untill the lien gets cleared (lien on land & MH) I’m content to let it go to sherif sale as the land owner (I’m also frequently the only one to show up at sherif sales in my area) this is also unlikely because the lien would have to get released first.
I don’t see any danger in forclosure or sherif sale, I’m just trying to figure out the best (cheapest quickest) way to remove the lien. -blake
p.s. I’m keeping the girls in the treasurey department in chocolates
Is that right ? - Posted by Keith (OH)
Posted by Keith (OH) on April 21, 2006 at 10:15:38:
Say you buy a tax lien in Arizona for 5K on a 200K property with a 150K 1st mortgage. You initiate foreclosure and the property is sold at auction for 50K. You as the tax lien holder will receive 50K and 1st mortage holder gets $0.
Is that right ?
Keith
Re: Is that right ? - Posted by Todd (AZ)
Posted by Todd (AZ) on April 21, 2006 at 17:08:01:
Hi Keith,
No, that is not correct. In your example, at the auction, one bids on the LOWEST interest rate he/she will accept. It starts at 16% here in Arizona. Let’s say you and I are bidding on this against each other. You raise your bidder card and say “15”, I say “14”, etc. until someone drops out. Then, one of us has a LIEN on this property earning X percent interest. 3 years AFTER the sale (5 yrs total), the lienholder initiates foreclosure assuming he/she continues to pay the taxes. It was sold once at auction and will not go back to auction ever again if you keep paying the taxes for the next 3 yrs. Now, follow me here…when you initiate foreclosure, you will, by law, be notifying the mortgage holder and any others with interests in the property. The mortgage co. will not let this go due to back taxes so they will pay your $5,000 PLUS the interest for those years to the treasurers office. Treasurers office in turns cuts you the check for your $5,000 plus interest for 3 yrs. Now, IF, HUGE/HUGE/HUGE IF, the mortgage company does not pay after being notified…drumroll please…you get this property free and clear. Your $5k investment (plus 3 yrs. additional taxes) gets you a $200,000 property. That $150,000 mortgage is wiped out! BUT, don’t start salivating yet. Regardless of those late night infomercials, THIS DOES NOT HAPPEN! 98.5% of all tax liens are paid off and its the INTEREST you are getting and investing for, not the property. I managed to get one years ago but I always targeted those properties with no mortgages and those I thought had marginal value that would go all the way thru without the owner paying the back taxes. The county treasurer said I was the first she had ever seen get a property with a structure on it (old mobile home). I paid about $4,000 and sold it for $19,000 cash and almost got killed over the deal (long story). Bottom line: After 10 plus years of investing in tax liens, I’ve stopped investing my money there. People bid the interest rates down too low and a 1% chance of getting property isn’t much to get too excited about. Hope this helps. Todd (AZ)
Re: Is that right ? - Posted by osupsycho (OK)
Posted by osupsycho (OK) on April 24, 2006 at 09:58:51:
Todd,
I gotta hear the story about how you almost got killed over the deal. Come on and spill it, I bet it is good…
Jad