Posted by MDonovan on March 15, 2000 at 09:14:51:
nt
Dangerous Florida law (Taking shortcuts part II) - Posted by MDonovan FL
Posted by MDonovan FL on March 14, 2000 at 12:35:30:
This law can send the honest cre investor to jail.
The history: Three years ago, my mother was working for an investor doing property management. She ran his whole rental enterprise which consisted of approx. 40 SFHs, at any one time. These were all purchased under preforclosure, and were then rented out. My mother would collect the rents and pay the expenses and her salary, giving the difference to the owner. This was all fine and dandy until the police showed up. Apparently, the owner was not making any payments on the mortgages and was stalling the foreclosures using many different delaying tactics. The mortgage companies were naturally pretty steamed at this, but there was nothing “illegal” about it, so they got the legislature to pass a law against it. Then they arrested the owner and prosecuted him. He told the DA that my mother was pocketing the money, so he could not pay the mortgages. My mother had proof to the contrary, so after a long trial, with a half dozen witnesses, this guy is now in the state pen for 20 years.
That’s where he belongs. He wrecked the credit of every owner who sold their house to him. One lady I know personally had 20 properties that she leveraged too fast, and she deeded them to this guy under the promise that he would save them from foreclosure. He didn’t. She now has no credit, and no property.
The big problem now is what the Florida Legislature has created in their efforts to take him down. Its now a third degree felony to miss your mortgage payments when you buy a house in preforclosure. Here’s the law: http://www.leg.state.fl.us/citizen/documents/statutes/StatuteBrowser99/index.cfm?mode=Display_Statute&Search_String=&URL=Ch0697/SEC08.HTM
The law simply says: If you buy two or more houses in one year in which the mtgs are in default and you keep rents from the property, and you fail to pay the mtg, you are guilty. This applies even if the default happens 11 months after you buy the property.
When you view this law under the scenario of my mother’s good buddy, it makes sense. And that’s how and why they created the law. But, the fact is, if you are L/Oing a property, and you miss one payment, you can do five years. Now you may say that a jury would not allow this, but let’s face it, it is real easy for the DA to frame us cre folks as big bad crooks, out to take advantage of some poor homeowner who is down on their luck. As if…
As far as I know there have not been any other cases, so there are no precedents to fall back on. And I do not want to have to argue my case from a prison cell.
Anyway, I just wanted to give a heads up to the FL folks here. Everyone else should review their own statutes regularly. You never know.
thanks for the input … just listening to Legrand - Posted by CarolFL
Posted by CarolFL on March 15, 2000 at 08:14:22:
on one of his tapes talking about taking the deed, getting a CYA letter, and waiting until the last minute to make payments or not at all if you couldn’t get the deal to fruition on the sale side.
I guess it would be interesting to see how a CYA letter stands up against FL statute.
Would really be interested in any case law anyone may know of on this.
Legrand’s point is that the seller is no worse off than before, and stands a better chance of your bringing the property out of foreclosure than he does. Then with a really clear CYA letter it covers the fact that you are not promising anything… not to make up arrears, future payments, whatever.
Look forward to info on this.
Carol
Re: Dangerous Florida law (Taking shortcuts part II) - Posted by chris
Posted by chris on March 14, 2000 at 20:44:39:
Is this guy William McCorkle?
-Chris
Re: Dangerous Florida law - Posted by JPiper
Posted by JPiper on March 14, 2000 at 13:07:08:
“Rent skimming” is a felony in various states. In Florida they evidently call it “Equity Skimming”. To avoid the ramifications of the law, simply make the payment. That shouldn’t be much of a burden to the honest real estate investor.
JPiper