Posted by John Merchant on December 18, 2007 at 14:58:44:
If the investor wasn’t on the note, then likely his credit won’t be affected in any way.
But do you and seller both realize that the other 7 lienholders can and likely WILL sue the seller (and maybe you too)on their debts?
Although their liens might have been wiped out, their rights to sue on their collectibles were NOT and now their only option will be to sue on those collectibles.
Atty Generals around the country have been getting upset about REIs doing this kind of deal with sellers where the seller isn’t told what’s going to happen…and the seller is lead to believe that his credit won’t be impacted, he’ll be debt free, etc.
Therefore I’d urge you to get your lawyer’s help with this beforehand and make sure you disclose everything upfront to the seller so you can’t be later accused of
anything improper or fraudulent.
Problem if foreclosure after deed is recorded? - Posted by DavidGOR
Posted by DavidGOR on December 06, 2007 at 12:26:36:
What kind of problems can an investor expect of any sort
(legal, monetary, etc…) if the house goes into foreclosure after
the deed is transferred from the seller to the investor?
(Background: The investor and seller agree to allow the
house to go into foreclosure to get rid of 7 liens totaling
$60k. Before the foreclosure, a Statutory Warranty Deed
which excepts (accepts) the foreclosing lender’s loan, is
recorded. The investor would buy the house at foreclosure
auction and give the seller $40k afterwards.)
Assuming the seller understands and is OK with this,
and the house has over $80k in equity,
will the investor have a foreclosure or anything of
any sort on their name, credit, or anything because
they were on title when it foreclosed?