Posted by djswett on December 04, 2000 at 22:51:17:
Is a mechanic lien a faster foreclosure than a TD? Or is it the same time schedule as a non-judicial foreclosure? Have you alaready filed your lien claim–can you beat the Jan 18 sale date?
With 57% LTV on the first and the hot Calif real estate market, I should think that a BK with a court mandated and monitored sale would be your best bet. I’d even pay the trustor to file the BK (or at least, buy him lunch and encourage this course of action) at least this would allow the lender’s lawyer to argue for a legal decision for a sale for indemnification. Then I know that there would be a sale for say 70-80% LTV and your lien would get paid off. I can’t see the trustor walking away from $300,000 without trying to sell the place unless . . .
I have often found that the trustor freezes cuz he thinks the 90 day redemption period is plenty of time to solve his problem and then bingo, he only has a few days to get bailed out and of course, he can’t find a buyer in such a short time.
You may be able to threaten him with a bad credit report. If the first TD is a public institution, then the foreclosure will probably automatically show on his credit report; if it is a private lender, it is quite possible that there will be no credit report trail unless someone, like you, submits the foreclosure info to TRW/Experian.
Posted by Jon Richards on November 27, 2000 at 20:15:49:
I am the owner of a mechanic’s lien on a property that is in foreclosure. I am hoping the payor does not go BK on me. In CA it is unclear if the lien takes precedence over a first lien. Mine does not. So I am holding a 2nd on a $785,000 building behind a $450,000 first.
My lien is for $48,000. Here’s what I did. I gave the contractor $450 for his $48,000 lien. If I collect, I get 45% of the proceeds and he gets the rest. If I collect nothing he keeps the $450. Because I have experience in forelcosures, I am hopeful I will get paid off, or get the property. We shall see. The foreclosure is scheduled for January 18, 2001.
Being in the note business is great? for understanding the intricacies of foreclosures and collections.
Another Idea on MECHANIC LIENS - Posted by djswett
Posted by djswett on December 04, 2000 at 23:04:14:
Had another idea.
Again, don’t know the intricacy of the mechanic lien (ML)foreclosure, but if it is similar to TD liens, then you should file you ML immediately and if the trustor does file a BK in January, then it is open for legal interpretation whether the count time period for your ML will toll. I have seen cases where tolling does not happen and your default counting period will continue while the guy is in BK.
If you get your ML right up to a final sale date before the first TD, you will have more power with the trustor and possibly (it happens), the first TD may screw up and not be prompt in their sale date filing. A big institution with a lot of default loans may not efficiently file their required paper work.
I think with a little negotiating, you can work your investment into a good $20k profit.