Posted by George(OH) on November 10, 2000 at 06:49:59:
I always wondered how to go about finding the ‘real’ owner in those situations.
In the last year or so, I’ve come across a couple dozen houses that had those winterized stickers on them. I knew they were foreclosed/REO’s, but it seemed like (on some of them) that the courthouse was a dead end as far as finding out who to get in touch with.
I guess it pays to have contacts in the right places, and like you said, be as knowledgeable as possible about ALL areas of REI.
what I learned today at the courthouse… - Posted by Dan Simpson
Posted by Dan Simpson on November 09, 2000 at 19:14:40:
As those of you that read my recent post regarding Bill Gatten and his idea know, I have been spending some time at the local recorder of deeds office across from my work lately…
Today I did a search within the last 5 days for “trustees sale deeds” and came up with a property where the trustee had no takers (I guess) for the house. The trustee was representing a bank from a far distant state that I presume was the holder of the mortgage that got foreclosed on. However, in the deed, the house sold to ANOTHER bank in a far distant state for roughly 10-15000 (still checking comps) below market. What is up here? Did the bank buy this property from another bank? Am I missing something? Also, there are NO deeds regarding assignments of any kind for this house. I checked all the deeds relating to this property and there was nothing except the original deed of trust and the trustees sales deed. How could this other bank own the property if the trustee didnt get an acceptable bid? it says on the trustees sales deed “bids were invited, but none was received for less than the whole of the property”. Then it listed $76,985 as a sales price (I guess?)and then it has the bank as grantee. Can someone explain this to me? Oh yeah the property is already listed with a realtor (for 92,900! have to lowball that baby!)and I am looking at it in 15 minutes. She told me that the property is a foreclosure.
I will keep everyone updated as to how it goes. Please help me out on this confusion above…
Thanks!
Dan
What the courthouse doesn’t tell you… - Posted by Bill Scott
Posted by Bill Scott on November 10, 2000 at 04:17:17:
Let me see if I can shed some light on what you’re looking at.
This property had a mortgage on it. The buyer of the property is the ‘grantor’ of the mortgage and the bank is the ‘grantee’. The $76,985 figure is what the mortgage balance was when the deed was filed.
Banks sell their mortgage holdings on too what is called the ‘secondary market’. They can do this in several ways—some of which can make you have a major headache in trying to figure them out. Here are some of them:
Sell off the right to service the loan–in return for a fee.
Sell off a portion of the income stream from the loan.
Sell the loan outright to a much bigger bank, at a discount, for cash upfront. Note that they are selling a loan—not a property and you often will not find a new deed in the records.
Banks can form a ‘pool’ of mortgages of a certain type–say ‘D’ type credit in rural Ohio counties and sell this pool to underwriters on Wall Street. In turn, securites are issued against this pool of mortgages, and the securities are rated based on the level of risk assigned to the pool.
And the ways of being creative just go on, and on, and on…
Anyway, when you find a vacant house you will probably find out about another layer of banks that ‘front’ for the owner banks in return for a fee. ‘Continental Mortgage Company—or Conti’ for short, is a big company that handles the property for the mortgage holding bank. They make sure that the property is listed, winterized (by another company who also leaves stickers on the property), and usually the offers go through this mortgage company. This can sometimes be a real P.I.A. because with this extra layer orders as to what offers will be accepted sometimes get to be a mess. I bought a three family that ‘Conti’ was handling and ‘Conti’ will NEVER tell you that the mortgage holding bank will do a ‘zero down’ deal. I got lucky and the broker knew a contact person in the other bank, I contacted the REO section to see if such a deal was possible. They said ‘sure’ and I closed on the property with zero down.
Anyway, I guess what all of this shows is that you have to get to know how the industry works by reading business magazines like the ‘Wall Street Journal’, and learn how to read between the lines. Research at the courthouse is helpful, but sometimes it’s just another step in a long chain of links to get to the real owner.
Thanks Bill! found out a bit more… - Posted by Dan Simpson
Posted by Dan Simpson on November 10, 2000 at 22:11:28:
Thanks alot for a most helpful response Bill. The second bank I mentioned, the one that is listed on the trustee’s deed sale, is indeed the owner of the property. That was verified today when I was speaking to the realtor and he had the info on the property. Somewhere in there, like you said, things happen that dont show up in the courthouse. I have a post about this house further up the list…
Thanks again!
Dan
I posted earlier today about Ocwen, but they don’t show up anywhere as the holder of the mortgage on this parcel, but I know the homeowner pays them. I guess I should skip Ocwen and go to the REO department of the holding bank (It’s Blazer CDC, never heard of them, but will work on finding them…)