FC Transfer- Land Trust or Personal Liability? - Posted by Walt (FL)


#1

Posted by Walt (FL) on December 09, 1998 at 19:25:01:

Bill and Bud,
I believe you are right on about certain states being weird when it comes to deeding properties in Foreclosure. Here are some excerpts from Ron Legrands FSBO Cash Flow Module, Tape 7 side B:

“In the cases where the seller is ready to leave and and wants little or No money, get a deed signed and notarized on the spot. Do not let a seller leave town without giving you the property, Anytime a seller wants to give you a house, I’m going to suggest you take it, as long as you don’t take in your own name, take it in a trust, and theres no way you can lose.”

“…Properties in Foreclosure, check your state law concerning title problems that may occur if the loan is not brought current at the time of transfer. An example:
In the state of Florida, if the property is in Foreclosure, that means the Foreclosure has been filed and the seller deeds me the property without bringing it out of Foreclosure the deed is virtually worthless… because there is a title problem there. If I take a deed and its already in Foreclosure the Foreclosure must be cured at the time I take title or I don’t have good title. And There are several other states with that same problem, so be aware of that if thats the case in your state…”

So apparently deeding to a trust is not a good thing to do unless/until the bank agrees to bring accept arrearages. I guess the thing to do would be to deed it to a Land Trust after the transfer and I own the property (Thinking is that it would be more easily transferrable without triggering the DOS)

Thanks for all your help, I need it…

Walt (FL) IBUYHOUSES@ij.net


#2

FC Transfer- Land Trust or Personal Liability? - Posted by Walt (FL)

Posted by Walt (FL) on December 09, 1998 at 02:22:14:

I am still trying to work a deal with that owner who is willing to deed the property to me (see earlier Post).
An attorney suggests getting her to sign an agreement that she will deed the property to me subject to my attorney approving deal. He would then contact bank to see if they will play ball with a NO Doc loan or work with me (The property needs a bit of work = $5K ??)

My Legrand training seems slanted at “getting the deed” via a Land Trust, but the FC may change things? I am new to structuring transactions, and am confused.

The attorney says that if I take deed I could be foreclosed upon under my name (without permission), and due to the foreclosure(lawsuit) in progress could be considered a fraudulent transfer. I prefer not to have to “ask” for permission and still keep my risk low, wouldn’t getting her to deed property to a trust and transfer the beneficial interest of the trust to me, afford me more contol by not having any $$$ in deal until bank agrees to accept arrearages and my payments.

I guess this is where the conventional and creative schools cross paths, what would people who are doing deals do? Does anyone have a familiarity with FC deals of this type in Florida?
Any help is appreciated, Thanks!

Walt (FL) IBUYHOUSES@ij.net

PS. it is all so much smoother and easier when I am reading how-to and following the info here at this site, but something changes when I am eye to eye with a deal… I realize how much “I don’t know what I don’t know”


#3

Re: FC Transfer- Land Trust or Personal Liability? - Posted by rudy-austin

Posted by rudy-austin on December 10, 1998 at 07:58:10:

Have the seller transfer the property to (their) a land trust and then assign the beneficial interest to you. you also need a cya letter about the Due On Sale on the loan and a specifific power of attorney for all transactions on the property. See Bronchick" Get that property out …course.rudy-austin


#4

Re: FC Transfer- Land Trust or Personal Liability? - Posted by Bud Branstetter

Posted by Bud Branstetter on December 09, 1998 at 13:18:31:

Florida is one of those wierd states that you must first bring it out of foreclosure to make the transfer of a deed value. I take that to mean even into a land trust. I’m not sure but I would expect you can secure you position by closing at a title company as a second lien. No acceptance of arrearages, no closing.


#5

Re: FC Transfer- Land Trust or Personal Liability? - Posted by Bronchick

Posted by Bronchick on December 09, 1998 at 12:58:41:

Taking a deed “subject to” the existing loan does not subject you to personal liability, except as to the borrower (if you promised her to pay it). If the property is foreclosed, you are named as the owner, but the foreclosure is not personal to you (as a practical matter, taking title in a trust will keep your name off it entirely).

True, if she files for BK her other creditors could claim this was a fraudulent conveyance, but this rarely happens if the equity in the property is small.


#6

Re: FC Transfer- Land Trust or Personal Liability? - Posted by Rob FL

Posted by Rob FL on December 09, 1998 at 20:11:49:

Don’t mean to contradict you, but the property can be sold during the foreclosure process before the auction is held. All you need to do is record the deed.

If it were me, I would take title in the land trust. When you go to reinstate the loan just send the lender a cashier’s check from your bank they won’t know who is reinstating it. Have the seller sign some type of disclosure that you can check the facts on his mortgage balance, etc.