Posted by edwin on May 09, 2007 at 07:11:41:
Thanks for your feedback…
NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by edwin
Posted by edwin on May 01, 2007 at 10:56:07:
Questions on…new nys law homeequity theft prevention act
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How does this law affect myself who wishes to door knock on homeowners who are in preforeclosure and pass the lead on to f/t REI’s…
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Can I still get a property under contract to do an assignment to a REI on a homeowner who is in preforeclosure with this new law and not be held liable if the REI who buys violates this new law
2 LINKS BELOW THAT YOU CAN READ ON THIS LAW
Re: NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by Jason Joyner
Posted by Jason Joyner on July 19, 2007 at 12:34:23:
How does the HETPA effect refinancing?
Re: NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by BTI
Posted by BTI on May 08, 2007 at 16:03:30:
Wow!
When I saw “equity theft prevention” I thought New York had finally done something about rent control, I should have known the’re not bright enough. Oh well, business as usual, bribe a super and move into a cheap rent even though they make $180k a year.
BTI
Re: NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by Curt Darragh
Posted by Curt Darragh on May 08, 2007 at 10:43:43:
Edwin,
Frank is right on, they do not want investors stealing equity. Unfortunately, the law that was passed and the original intent are two seperate things. The intent was to keep investors from telling homeowners they would cure the foreclosure and let them rent it until they got back on there feet and then buy it back, only the investors would not pay the bank and would evict the owner and sell it for a killing. I agree, this shouldn’t be allowed, but unfortunately the way the law was written, we can’t even help if the owner WANTs to sell. The only two remedies I see are purchasing the second mortgage at a discount(assuming there is one) and then take the deed back in lue of foreclosure and purchasing vacant pre-foreclosures. The law is clear, this only pertains to owner occupied residences. If the property is vacant the owner must be living somewhere else. Best of luck.
Curt Darragh - President
Mid-Hudson Valley REIA
www.MHV-REIA.com
Re: NYS HOME EQUITY THEFT PREVENTION … - Posted by Frank Chin
Posted by Frank Chin on May 02, 2007 at 07:40:10:
Edwin:
I’m not a lawyer.
But seeing the way the preforeclosure process works, and how the new state law requires, the onus is placed on the the preforeclosure investor to make it an arms length, and fair transaction.
For instance, it requires the REI to not “Deceive or mislead you in any way about the value of the house”.
If something goes wrong, or even not, the buyer is surely going to claim he’s deceived. The law was passed because “preforeclosure” investors had gotten the reputation of a “flimflam” man in the eyes of the press, what investor is going to get a fair shake in court if the seller decides to sue, saying he was deceived?? And the remedy is the return of the home!!
And the law says the REI investor is also not allowed to say " He or she is helping you to ?save? the house or ?prevent? a completed foreclosure, or is ?acting on your behalf? as an ?advisor? or ?consultant? or on behalf of any other homeowner in foreclosure or default.
What is the investor going to say?? “I’m here to make 50K off your misery”???
And then the law goes on the say to the buyer “However, the Act only requires that the buyer pay you at least 82% of the home?s fair market value”.
Ed, with the law, I can’t see a rational REI touching preforeclosures with a “ten foot pole”.
How does that affect you??
You’re the guy signing the contract with the seller, so you’re the one that has to make sure all the representations are in accordance with the law, you did not deceive the seller, you offered at least 82% of FMV, whatever that is, subject to dispute later on.
And if I’m the REI you assigned the property to, and assuming that I’m happy to make enough ONLY on the 82%, I would surely come after YOU when something goes wrong, because you were the guy that knocked on the door, made representations to the seller, did the contract, and if I get sued later on, with the seller demanding his home back, after I did a L/O with someone else, who would be suing me.
Do you get the idea the state DOES NOT want investors doing preforeclosures??
Frank Chin
Re: NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by edwin
Posted by edwin on May 08, 2007 at 12:08:53:
What do you mean by taking the deed back in lue of foreclosure, how this accomplished, who exactly are you getting the deed from the bank once it has been foreclosed or owner confused here…
Why can’t we help the home owner even if he wants to sell
Re: NYS HOME EQUITY THEFT PREVENTION ACT NEW LAW - Posted by Curt
Posted by Curt on May 08, 2007 at 15:11:34:
If a bank is foreclosing, they may offer to accept the deed in lue of foreclosure. This is where the owner just deeds the property over to the bank instead of going through the entire foreclosure process. It saves the bank from the expense and time of a completed foreclosure and looks better on the owners credit report. If you (the investor) buy the note and mortgage from the bank, you in essence become the bank and can offer this to the owner.
We can’t help if the owner wants to sell because if the transaction falls under this law (you buy from an owner occupant who’s in default of 2 months or more) then the title company will not issue a complete title policy. They will insure it but will place a clause that if there is any problems due to the owner coming back under for the property under this law, the insurance policy is null and void. At least that’s been my experience thus far. If you an investor who’s buying with cash its not a big deal, it becomes a problem if you try to sell to someone getting a mortgage. Hope this clarifies.
Assingment - Posted by edwin
Posted by edwin on May 08, 2007 at 16:22:16:
Thanks curt:
I have spoken to a few investors who are still interested in purchasing pre-foreclosure properties that I or my associate bring to them from door knocking, they said they have already spoken to their attorney and will continue as usual.
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I am curious as to how will they buy if the owner we speak to lives in the property, and wishes to sell anyway regardless of this law.
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Is the owner breaking the law if he sells regardless of this law and will the investor be breaking the law if they buy.
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Are there any legal loop holes legally that investors can do to buy a pre-foreclosure and is one of them if they buy with cash.
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I have a concern in going after pre-foreclosures with this new law. My concern can i still function as a wholesaler get the property under a contract and still do an assingment to an investor and can I also be held liable if an investor does something illegal.
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My concern is this if I am not able to get a property under contract to assign and I fax info over to investors on this property that I may not be able to get what I am asking for and that I may lose the property to some investor who goes behind my back. So the question is if I cannot get property under contract to assign because of any liabilities that may come with getting property under contract how can I still protect myself from having my leads taken by some investor behind my back, which can happen since I will be dealing with a buyers list.
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If you were in my shoes and functioning as a wholesaler how would you proceed to maximize your percentage and reduce risks involving having your leads stolen in wholesaling preforeclosure properties
thanks.edwin
Re: Assingment - Posted by Curt
Posted by Curt on May 09, 2007 at 07:06:24:
- I am curious as to how will they buy if the owner we speak to lives in the property, and wishes to sell anyway regardless of this law.
I won’t, because if the seller chooses to, he can come back later and claim I broke the law. The risk is just not worth it for me.
- Is the owner breaking the law if he sells regardless of this law and will the investor be breaking the law if they buy.
No
- Are there any legal loop holes legally that investors can do to buy a pre-foreclosure and is one of them if they buy with cash.
Buying with cash doesn’t change anything. The only two options I’m aware of are those mentioned in my earlier response, buy the mortgage at a discount, or buy vacant properties.
- I have a concern in going after pre-foreclosures with this new law. My concern can i still function as a wholesaler get the property under a contract and still do an assingment to an investor and can I also be held liable if an investor does something illegal.
You need to find out whether or not the investors you flip to are still buying pre-foreclosures and if so under what cirmcumstances. I’m not an attorney, but my opinion is yes it’s possible you could be held liable.
- My concern is this if I am not able to get a property under contract to assign and I fax info over to investors on this property that I may not be able to get what I am asking for and that I may lose the property to some investor who goes behind my back. So the question is if I cannot get property under contract to assign because of any liabilities that may come with getting property under contract how can I still protect myself from having my leads taken by some investor behind my back, which can happen since I will be dealing with a buyers list.
Not sure how to anwer that.
- If you were in my shoes and functioning as a wholesaler how would you proceed to maximize your percentage and reduce risks involving having your leads stolen in wholesaling preforeclosure properties
Find out what your investors are still buying and then concentrate on that.
Best of luck!