BK Trustee Recommends Home to go into Foreclosure - Posted by DavidGOR

Real Estate Investing Real Estate Law
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Posted by Frank Chin on December 10, 2004 at 15:51:00:

David:

I’m not an attorney, but I’ve served on “creditor committees” in BK, both as a secured and as an unsecured creditor.

The Trustees’s responsibilty is to make sure creditors get their due. In this case, if the seller gets something for the home, it goes to the secured then the unsecured creditors. I could see the debtor owing a few dollars to credit card companies beside the mortgage that he’s behind on.

Now, if I was to learn that some REI waltzed in, did a sub2, and the seller received nothing, I would demand an investigation if the trustee received a bribe to pull off the deal. I would yell loudly “where’s my money”??? And if it turned out the trustee received no bribe, I would think “how stupid could he be”

As an unsecured creditor, I would say the trustee would be unethical not looking out for my interests.

Frank Chin

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BK Trustee Recommends Home to go into Foreclosure - Posted by DavidGOR

Posted by DavidGOR on December 09, 2004 at 17:30:26:

I know a home seller that is in BK 13. There is 215k
owed on the house, low comps are 230k, behind 5k.
I plan to buy subject-to, finish 700 sqft, then quick
sell for 265k.

The Attorney trustee doesn’t recommend for the seller
to sell the home if the seller doesn’t get anything from
it. The trustee says, “A BK is already on his record, a
foreclosure isn’t going to make it worse. He’s better off
living in it for 3 months free and saving money. It’s too
much work for me and would cost fees for the creditors to
approve the sale.”

Is this “ethical” advise from the trustee? What would you do?

DavidGOR