Posted by Ben (NJ) on March 11, 2000 at 17:02:48:
Yes, the attorney for the bank said the only reason the
bank allowed him to take title in corp. name was because it was investment property rather than owner occupied property. I don’t know their rationale but I’m sure if the corp goes belly up and there are no other assets the bank cannot get a deficiency judgment.
Should I buy this note…expecting all-out WAR ! (long) - Posted by Ben (NJ)
Posted by Ben (NJ) on March 11, 2000 at 13:10:53:
In a recent post I mentioned that I am foreclosing on a tax lien on a beautiful suburban home worth about $500,000. The pay off figure on my lien is $46,000. The bank who holds a first mortgage (junior to me) is owed $237,000. The bank is also foreclosing on this property for the SECOND time in five years and has agreed to sell me the note so I can proceed with my foreclosure to judgment. Here is the rub, I just found out that the property owner is a tough, experienced certified civil trial attorney (this means he has done so many trials to verdict that he has achieved a special designation from the state). He may also have committed bank fraud because the home is owned by his corporation and in order to allow him to do this he had to represent to the bank that this was rental property but he moved right in. Anyway, I am expecting an absolute full-scale BLOOD BATH of a defense from this guy replete with multiple, drawn out and staggered bankruptcies, with every motion made and every delay possible (of course since he will be his own attorney it it won’t cost him a dime in legal fees)I will also have to continue to pick up the taxes as long as this goes on ($10,000 per year). I have two choices, 1) don’t buy the note, then the bank will just pay off my lien, I will walk away with a nice profit from the interest and he will be their problem, 2) discount the note HUGELY to make all the potential aggravation worthwhile. What do you think ? If I choose # 2, what should my number be?
New Jersey is a very debtor friendly state - Posted by Michael Morrongiello
Posted by Michael Morrongiello on March 11, 2000 at 17:33:35:
Ben:
As you well know this is a real speculation and not necessarily a safe investment. I also beleive New Jersey has a very favorable equity rights of redemption period of time in which the foreclosed debtor can “redeem” his property back.
With the unknown time factors associated with foreclosing out this bozo, I would not pay much more than 50% on the dollar and perhaps even less for the uncertaintly.
As John has stated, an attorney who partners up with you might be a good partner.
Michael Morrongiello
Confuscious say…Let Litigious Lizards Lie - Posted by John Behle
Posted by John Behle on March 11, 2000 at 16:23:46:
With the little bit you’ve said, I wouldn’t find it worth the hassle. It might seem easy and straight forward - until you deal with one of these types. I’ve seen someone like that put up a fight for years using every legal and illegal trick possible.
I’ve seen it cost tens and even hundreds of thousands in attorney fees. What does he have to lose? He gets free rent for little effort and possibly even wins through some sneaky tactic. Not that he should, but I’ve seen where it happens. The likely scenario is as you say - multiple bankruptcies, lawsuits, massive legal fees and a LONG time.
I would only do it with an attorney as a partner.
Re: Should I buy this note…expecting all-out WAR ! (long) - Posted by CarolFL
Posted by CarolFL on March 11, 2000 at 16:20:09:
I won’t even begin to address the substance of the post … will leave that for someone who feels so inclined and well-armed… but I do have a question…
If his corp owns the house, and he is renting it from the corp, then how is that fraud? it IS rental property, no? He is not his corp.
Were you advised by your own legal beagle that this might be fraud? Always curious about using one’s corps, etc.
Thanks for the input.