Posted by Mike W on September 08, 2004 at 16:36:24:
Tony,
California has other rules you need to be aware of.
One of the problems with CA 1695 is the mandatory waiting period. Re-read 1695, it will save your a…
Usury is your biggest problem as I see it. Let me explain.
1 - You are taking title to a HOMEOWNERS property in default in California! Yikes.
2 - You are letting them buy it back for “only” 10 point and 12 percent interest.
The AG (attorney general) looks at this as a financing scheme, not as a discount sale and buy back.
3 - I don’t know the penalties for usury in Calif, but I imagine they cost more than you would make.
If however they are not HOMEOWNERS, then its a whole new ball game.
California Real Estate Investment Advice - Posted by Tony Vitaliano
Posted by Tony Vitaliano on September 08, 2004 at 13:22:55:
I am trying to find some leagal guidance for an investment strategy I’d like to test in California. I want to advertise and offer to bring mortgage payments current through the use of a personal loan I would provide the person who has fell behind on his mortgage payments.
For my loan, I would ask for 10 points and 12% interest only payments until such time as the party could pay the principal, preferrably 1 to 2 years. Here’s the questionable part. Can I ask them to warranty deed the property over me until such time as they pay me in full? I would like to know that if they default again, I would have the ability to ask them to vacate the property.
I read up a bit on California state law 1695 and I thought before I atempted to test this idea with marketing and advertising dollars, I should first make sure it is a reasonable thing to do and I can do it legally.
I’d appreciate any thoughts any one might have on the matter.