and therein lies the problem - Posted by Marc Donovan
Posted by Marc Donovan on June 16, 2007 at 05:52:25:
Whose to say how much you should make? Will one jury think that 10% profit is excessive? We all have heard the rule of thumb that you dont touch a property unless it is 70% of FMV or better. That means you are “stealing” 30% of the poor homeowners equity. Think you can argue otherwise? A good DA will rake you over the coals.
I gave you the link in the post… - Posted by JT-IN
Posted by JT-IN on June 15, 2007 at 10:26:26:
Yes, HB 65 seems to be all about surplus funds… and it largely is. The bill (from memory) prohibits anyone from taking title to a property following the filing of a foreclosure suit against its owner, then later claiming the overbid amount following the clerks sale. If you do, you will have to deal with hell and high water to make a claim for such funds.
Along about page 12 and 13 of the bill, it does outline things like deception and victimization in dealing with purchasing someones property who is in foreclosure and spells out a $ 15K penalty per occurrence. An occurrence is not one purchase, but one purchase could have MANY occurrences, meaning that you could be fined dearly over doing one deal.
I do not know of anyone who has had the wrath of the law brought upon them. You would be in a better position to surmise that with the group that you mentioned.
From the previous post:
"Review FL HB 65. Make certain that you are conversant with the law and know where and how not to run afoul of the legislation. You can read about it at the link below:
Re: and therein lies the problem - Posted by BigV
Posted by BigV on June 16, 2007 at 15:26:21:
I see your point, however, something is not right when “RE investor” can legally walk away from the closing with 200K profit giving the elderly seller $100 for their equity.
And I bet that it’s deals like these that are forcing legislators to react, not 30% profit deals.
Yes, anyone can abuse the law, but if you try to be fair and to treat all sellers fairly (like you’d want your family to be treated) you should be OK.
Re: I gave you the link in the post… - Posted by BigV
Posted by BigV on June 15, 2007 at 17:20:10:
but this rule DOES make sense, right? I mean what is the investor doing tying up the property, letting it go to the sale and then claiming the proceeds?
At least in the case where the investor BUYS the property BEFORE the sale, he/she is doing the service in that they help the homeowner to not have a full blown foreclosure on their credit report.
This law makes sense now.
Re: and therein lies the problem - Posted by Marc Donovan
Posted by Marc Donovan on June 17, 2007 at 05:35:14:
Taking advantage of the elderly. That one has been hashed and rehashed here.
What does age have to do with it?
If I offer to buy your house for $100 and you accept, why do you consider that to be “not right?”
You draw the line at 50%. I don’t draw that line at all. As long as it is an arms-length transaction and nobody has deceived anyone, it is fair play and should not be challenged later by the DA.
This is truly an evil law and it is bad for both the investor and the foreclosee.
Makes sense? I dont think so… - Posted by Marc Donovan
Posted by Marc Donovan on June 16, 2007 at 05:48:19:
This is now a law in FL. FS 501.2078
http://www.flsenate.gov/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0501/SEC2078.HTM&Title=->2006->Ch0501->Section%202078#0501.2078
“in the case where the investor BUYS the property BEFORE the sale, he/she is doing the service in that they help the homeowner”
This is exactly what this law prevents. See for yourself:
(c) “Victimize” means any course of action intended to dupe, swindle, or cheat a homeowner subject to a residential foreclosure proceeding. The factors that a court shall review when determining whether a course of action is victimizing a homeowner are:
The compensation received relative to the risk and the amount of work involved.
The number of homeowners involved.
The relative bargaining position of the parties.
The relative knowledge and sophistication of the parties.
Representations made in the inducement.
The timing of the agreement.
(2) Any person, other than a financial institution as defined in s. 655.005, who willfully uses, or has willfully used, a method, act, or practice in violation of this part, which method, act, or practice victimizes or attempts to victimize homeowners during the course of a residential foreclosure proceeding, and in committing such violation knew or should have known that such conduct was unfair or deceptive, is liable for a civil penalty of not more than $15,000 for each such violation.
Basically leaves it all up to the judge and jury to decide. That’s not a good law. It is way too vague. Until there are some test cases that make it through appeals, we have no idea how the court will go on this.
Best course of action is to ignore homeowners in foreclosure. The end result of this law is that folks in foreclosure can no longer sell their property because nobody wants to expose themselves to this law. So there are no offers and the bank gets the equity.
Guess who lobbied for this law? The banking industry. Notice the exception above “Any person, other than a financial institution as defined in s. 655.005” This says that it OK for a bank to swindle and cheat a homeowner. How could Jeb Bush sign this and sleep at night? We will never know.
Re: Makes sense? I dont think so… - Posted by Bob Smith
Posted by Bob Smith on June 17, 2007 at 08:20:33:
Foreclosure actions are also exempt, as is anything negotiated by the foreclosing party. If you can buy the note and get a deed in lieu, for exaxmple, you are safe, where an economically equivalent deal as a mere buyer wouldn’t be.