Big banks' shortcuts create opps? - Posted by John Merchant

Real Estate Investing Real Estate Financing
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Posted by Rick, the Probate Guy on September 28, 2010 at 12:46:48:

Hey John - I don’t know WA State’s statutes but if what you’re saying is accurate, I’d agree that there are opp’s, both for existing lienholders and their assignees, if you know what I mean.

In CA, trustees are not require to notice certain lienholders (involuntary like AJ’s, etc.) but definately IRS, voluntary lienholders like TD’s, and recorded Request for Notice, etc. Whatever shows on the T.S.G. is what generally goes out.

So, the big question is: ‘how do you know for certain if you, as a WA lienholder. not noticed unless you have a coipy of the T.S.G.?’

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Big banks’ shortcuts create opps? - Posted by John Merchant

Posted by John Merchant on September 24, 2010 at 13:23:01:

It’s just come to my attention that one of the big national banks doing business in WA State is maybe routinely taking a couple of shortcuts in their DOT Foreclosures that could create big problems for that bank…but big opps for REIs.

The shortcuts I’ve seen now on on 2 or 3 of their non-judicial DOT foreclosures are first, their use of a non-conforming legal (as defined by WA Statutes)newspaper to publish its statutorily required 2 publications on the scheduled trustee’s auction and secondly on their failure to “notice” all lien-holders as required by WA Statutes.

The first is maybe not of much use to the REI now, but the second certainly could be.

WA statutes clearly state that if any recorded lien-holder is NOT “noticed” by provable service of notice upon him/her, that neglected lien-holder’s lien interests in the foreclosed RE have NOT been extinguished.

And a suit to try title might be brought against the foreclosing lien-holder (the bank)to have a court enter a judgment that the omitted lien-holder still owns that lien interest which then becomes a big cloud on that “owner’s” title.

So if you’re an omitted lien-holder with a 2d mtg behind a foreclosing bank and you’ve not been notified as your state’s law say you must be, your lien has not been extinguished.

How to use this info?

Well, consider the cost to the bank in having to redo its foreclosure and this time, get it done right…and just maybe that bank could now be interested in a short sale to the REI whereas before, they were maybe pretty aloof.

My advice to any 2d mtg holder anywhere would be to carefully study your state’s statutes and see if the foreclosing bank performed each and every step as required by that state’s stats and if not, what does your state now say your rights are.

I’m currently working with an omitted 2d note and DOT holder who was NOT notified and he’s going to approach the bank with a serious short-sale proposition to see if they’d maybe prefer to SS to him now rather than have to go through the DOT Frclr again.

And that bank’s lawyers could be seriously concerned about the class-action possibilities arising, to-wit: How many others (hundreds or thousands?)were likewise illegally “noticed” and how many claims for damages could now exist.