Comment

Comment by Tracy Howard on December 10, 2009 at 2:05am

I represent an investor who buys the property at foreclosure sale, fixes it up really well, and puts it on the market after 91 days (to satisfy the FHA requirement), and then sells it at a fair price on the open market. This company is a pleasure to represent, because they are doing a lot to help the general market in the area they serve. They are making a small profit on each of the houses they fix and flip in this manner. And they are helping a lot of first-time buyers who would not otherwise be able to buy a decent house at a decent price.

Comment by Tracy Howard on December 10, 2009 at 1:55am

During the "wrap-around" craze in the late 70s - early 80s, we had an "investor" who sold properties that were wrapped and rewrapped as many as 15 times. Against the law and the investor became a long-term guest of the State of Colorado penal community.

In the early 90s we had a guy that was going around filing Lis Pendens on properties of people whom he judged had given him a "bad deal," feeling that he had a right to file a lien against their properties. Too bad, one of them turned out to be a District Court Judge, who brought him up on charges, and that guy, too, became a guest of Colorado.

Filing these kinds of documents against a person's real property is viewed as a bad deal in Colorado, as I guess it would be in most jurisdictions. Best not to get involved with those who are practicing this kind of fraud.

Comment by Tracy Howard on December 10, 2009 at 1:46am

If these investors are actually recording these documents against a property they do not own, sounds like Florida is going to be faced with lots of title clouds. In Colorado, this would probably require a Rule 105 Quiet Title Action (a/k/a judicial foreclosure) to remove the cloud from the title. Banks should reconsider before they work with this kind of investor. If the investor walks, then a title problem may have been created for the seller and therefore also for the bank, unless the investor is "kind" enough to file a release of whatever document was used.

On the other hand, a judicial foreclosure in Colorado (10 months or longer, depending on court calendar) takes a lot longer than the Public Trustee's foreclosure (4-6 months), and the seller gets to stay in the house a lot longer. Who knows what might happen during that time to help the seller's finances, so perhaps the seller can rescue the home, or get a bona fide buyer and have the court approve the sale on a "short" basis.

Comment by Pam Graham on December 9, 2009 at 9:11am

I'm in the Jax, Fl area and we have been seeing short sale listings mentioning a trust. From what I've seen and read an investor starts a trust and I guess the seller signs the deed over to the investor. The investor offers a lower price to the bank, but lists it for much higher to make a profit at closing. Well that's fraud and the FBI and DBPR has been here investigating these cases. These investors are not telling the mortgage company nothing, the mortgage company has no idea. Serious stuff!

Comment by Karen Mathers on October 8, 2009 at 1:07pm

Hello Richard . . . I don't know about agents getting any of the profits but it was presented to me as a means to slow the foreclosure process, remove the Lis Pendens, and guarantee we would get our full commission. The full commission part sounded good to me but having someone with a lot of experience working short sales seemed like a great idea. Now I am seeing other agents charging transaction fees on the deal as well. So I guess you are right. . . they are getting part of the profits. I know how to spot them now, so I was surprised to see one of them renting a booth at the FAR convention in Orlando last month. They are everywhere!

Comment by Katerina Gasset on October 7, 2009 at 5:17pm

Hello Richard! The flippers are down here in Florida now and the Palm Beach Post even thought is was super newsworthy:) We just had a seller call us who wants to list saying he asked for info from some company out of JAX Fl., and they sent him a big package. He is going to save it for us. I am curious to know what it entails:)

Comment by Richard Zaretsky on October 7, 2009 at 3:32pm

OH NO! Not again! Dealing with flippers is usually a money losing proposition - unless the agent is sharing not in the commission but in the profit! I've seen it where the supposed seller's lawyer actually was profiting from the flip - I even wrote about it on ActiveRain.

Comment by Karen Mathers on October 5, 2009 at 6:41am

You live and learn. Everyone want to get a good deal, otherwise they would not be doing a short sale but the investors are looking for a steal of a deal. It is a numbers game for them.

Comment by Sharon Senger on October 4, 2009 at 10:18am

Karen,
In my opinion it is advisable for the seller to engage the services of an experienced Real Estate Agent to help them with a short sale. That way they know that the agent is working in their best interest and they are kept informed of what is happening in the transaction. It sounds as though you had a bad experience with the Investor and as you say they are looking to make a profit and if there is none will walk away from the deal.

Comment by Karen Mathers on October 4, 2009 at 9:07am

The last and only deal I have done with an investor who was going to flip it on the same day, became a problem when the bank wanted $110 and the end buyer was only willing to pay $110 . . . there was no money in it for the investor. The investor tried to negotiate the deal for a month longer and then walked and I had to start over with a new contract without the investor. When the investor first contacted me, I did not know how to do a short sale so I though it was a great idea. Now I do my own short sales and I know exactly what is being said to the lender because it is me talking to them!

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