Posted by Brad-Pa on June 20, 2007 at 13:45:52:
WAREIA,
I want you to be right on this, I’d like to explore the use of trusts for certain deals, and have not, mostly due to this issue. Here’s what I based my position on, can you shed some light on what I’m missing in this?
http://www.revenue.state.pa.us/revenue/cwp/view.asp?A=238&Q=268607
Deed Transfer prior to short sale - Posted by Anne
Posted by Anne on June 18, 2007 at 14:01:59:
For those of you who’ve done a lot of short sales, is it common for the bank to request the homeowner deed over the property to the bank prior to finalizing the short sale?
I took Dwann’s course and have been working with a couple of ladies who do short sales as a niche market and have never heard about that before so I’m just a little leary.
Since my purchase contract and limited power of attorney are with the homeowner, don’t they become void if the bank is now the deed holder?
Thanks for your help.
Re: Deed Transfer prior to short sale - Posted by WAREIA
Posted by WAREIA on June 19, 2007 at 21:27:47:
We have the Seller deed the property to a Land Trust before every Short Sale we do with no problem at all. That way we can negotiate a price with the bank and sell it to an End Buyer without seasoning issues and without having to use our own Credit or Cash and get paid at the closing.
Re: Deed Transfer prior to short sale - Posted by WAREIA
Posted by WAREIA on June 19, 2007 at 21:27:13:
We have the Seller deed the property a Land Trust before every Short Sale we do with no problem at all. That way we can negotiate a price with the bank and sell it to an End Buyer without seasoning issues and without having to use our own Credit or Cash and get paid at the closing.
Re: Deed Transfer prior to short sale - Posted by JT-IN
Posted by JT-IN on June 19, 2007 at 05:12:49:
Can’t imagine a Lender wanting to be involved in the chain of title and the official seller of record, by taking title to the property. This doesn’t sound normal or usual at all, so beware.
Who is the Lender that is requesting this procedure…?
Yes, your POA and contract are void, are only enforceable to the current owner, so you are giving up whatever toe-hold you may have here. On the other hand the Lender in a short sale holds all the cards, so they certainly do get to control the tempo and the ground rules…
JT-IN
Re: Deed Transfer prior to short sale - Posted by michaela-CA
Posted by michaela-CA on June 18, 2007 at 16:24:36:
Anne,
I’m not into short sales, but I agree with you. Sounds fishy. Once they have the deed, they own the property.
Michaela
Re: Deed Transfer prior to short sale - Posted by clyde
Posted by clyde on June 22, 2007 at 11:50:26:
How can this be? If the property is deed to you. You then own it. What you are saying is that after you own it (your land trust actually holds title) then you negotiate with the bank for a lesser price? What would you do if the bank checked title and found it had transferred to your trust and they refused to negotiate the price?
You cannot simply give it back…as the receipent of the deed can refuse to accept it in most states.
Looks to me like you are doing fraudulent transactions.
Clyde
Newbie Alert - Posted by Brad-Pa
Posted by Brad-Pa on June 20, 2007 at 08:03:29:
Just an FYI, the concept of deeding to a trust in this situation sounds great, just be aware of laws in your state. I am in Pennsylvania, and you can certainly do this, but NOT without paying the 1% transfer tax.
Re: Deed Transfer prior to short sale - Posted by Clyde
Posted by Clyde on June 22, 2007 at 11:53:27:
There have been several notice to look out for the WAREIA (Wasach Area Real Estate Investors Assn) of Utah…looks like we need another update on “Watch out for them”
Re: Deed Transfer prior to short sale - Posted by WAREIA
Posted by WAREIA on June 25, 2007 at 11:36:25:
Nope. The Owner/Seller deeds it to their own Land Trust. The Banks DO KNOW that the property was deeded to the Owner’s Trust and have no problem with it.
There are NO Seasoning Issues because it is their own Trust of which they own 100% of the Beneficial Interest. They are transferring the Title from themselves, to themselves for Asset Protection Purposes. Once the property is in Trust it is protected from any further encumbrances such as judgements etc.
No Fraud here, only following Federal Law. We then purchase and fund the transaction for the amount of the debt and immediately sell the property for a profit in a Simultainous Closing.
The End Buyer’s Lender doesn’t have an issue with seasoning either since it was and is the owners/sellers trust.
Re: Newbie Alert - Posted by WAREIA
Posted by WAREIA on June 20, 2007 at 12:59:30:
I’ve done dozens of these type of transactions in PA and there was NO Transfer tax required on my transactions or Trusts.
I’ve also run in to this in other States and addressed it with the taxing bodies and resolved it in my favor everytime. It all depends on how you do the Transfer of Title and to whom.
Re: Deed Transfer prior to short sale - Posted by BTI
Posted by BTI on June 23, 2007 at 10:08:20:
Clyde
As an investor for 52 years and a California Real Estate Broker for 42 years, the old saying if I could have a dime for every time someone said something is illegal or something can’t be done, etc, I would be rich, applies to your warning.
I’m currently residing in Utah for medical treatment, wonderful state, great people by the way, and when I first started reading the posts by WAREIA I started asking around town and only got positive feedback.
You might be wise to heed his posts and investigate whether you can use these tools in your investment program. Long ago I developed a program that I call skinny investing, only 8 people in the world know how it works. I taught it to 3 people here and one of them is on her way to $750,000 this year and I suspect it is similar to WAREIA’s investing. I only wish I had the time and energy to join her.
I’m sure I will meet WAREIA someday and I’m sure he won’t be in the category your trying to put him in. And remember your always free to use, or not use any advice you receive on this site, but ignoring some advice may end up costing you in the long run, as well as following some advice. Researching said advice may add much to your net worth.
BTI