Speeding Up Foreclosure

[Mensa1]

AHHH!! Thanx for the info., I may need it. The bank cannot object to you transfering title, even if property is foreclosed or in some state of foreclosure?

The transfer may not be a perfected and marketable title but the object of the game here is what shows up in public record. Yes, you could tranfer title and it would show up ABC, LLC as the legal owner. Could ABC, LLC transfer unencumbered title? NO. But the City isn't going to chase John Doe as the previous owner any longer and that is the challenge at hand, isn't it?

[sofarsogood2]

Oxymoron: Creative Atty.

Okay, poor choice of words. "An attorney who is knowledgeable enough, and cares enough, to find an existing law, or case law that would likely force the lenders dragging their feet on foreclosure or title action to take said action in a timely manner to protect their own interests, or take such action to avoid the cost and aggravation of answering any such attempt to sabotage their interest."

Still probably not accurate enough...but I tried.

Hey, I completely admit I am pretty much clueless on this legal stuff! Hence all my questions!

[sofarsogood2]

The transfer may not be a perfected and marketable title but the object of the game here is what shows up in public record. Yes, you could tranfer title and it would show up ABC, LLC as the legal owner. Could ABC, LLC transfer unencumbered title? NO. But the City isn't going to chase John Doe as the previous owner any longer and that is the challenge at hand, isn't it?

Got it! Thank you again, this could be useful in the future.

[AngelinaCatHub]

I see the point in your suggestion 'Hub. However, renting to someone, even if on a month to month basis, feels wrong. They would have to move again, possibly in 3 months, 6 months, who knows? I woudn't want to be a party to another family's hardship.

I guess maybe renting to a single person without children who understood the ramifications and could pack up quickly and leave. You'd be renting it cheaply in return for the possible complications.

Then there's the income taxes to be paid on that income with no expenses to write off on it.

Hmmmm...

Mensa:

The LLC thing is a thought, but eventually wouldn't the bill come back to you?

Well of course. That is why I said "month to month". The renter would have to be fairly trustful and informed this is temporary. The house is still the Deed holder's and he could rent it if he wished. I always think half of something is better than all of nothing. That being said, if a person gets $100 rent minus 15% (for IRS), he still nets $85. Part of a low rent could be the maintenance the person is being fined for.

By the way, the person getting fined, if they go to the City Hall and talk to codes enforcement and department, it is possible to have the fines forgiven by request if the event is fixed. 'Hub

EDIT: P.S. it is better for the house to be occupied as protection against marauders.

[justbroke]

No, this attorney was filing QUIET claims- not quit claims. I don't really understand it yet- trying to research.

I see that Mensa has described the differences between the two types of actions with one being a quiet title and one being a deed (quit claim).

Many have come on BKForum wanting to, but no one has been successful at Quit Claims or Quiet Title Actions. The fact that there is a recorded mortgage with no satisfaction of mortgage recorded would allow any bank or lienholder to prevail in any court. This has been tried many times in Florida as well, with only an HOA or two being successful in South Florida, and that was on a reverse foreclosure.

It's all Hocus Pocus.

[BCA2009]

What if

What if you sent the bank notice that if they didn't take possession and resolve the code issues, that you were going to pull the appropriate permits and have the house demolished to avoid futher code violations.

I know this would probably cost more that just fixing the code issues, it's more of a theoretical question.

You still have the title/deed in your name therefore you are the owner of record. You have made a bonifide attempt to transfer ownership to the bank. They refused. You demolish the property to "avoid futher code violations".

What recourse wouth the bank have? You are no longer liable for the original debt do to discharge in BK. The bank has an interest in the property but they have refused to exercise it. You dispose of you own legal property.

This would be the opposite of what that guy that bulldozed his was doing.

I'm sure I'm missing something.

[parkd]

Doesn't a quit claim require input from the lender? If that is the case then why would the lender allow the home owner to file a quit claim to an LLC shell company? The LLC would have no interest in the property from a legal standpoint so how could they be used as the owner in a quit claim if the original lender never gave permission?

[justbroke]

Please read your security instruments (Mortgages) and your Promissory notes (Note). Almost all of them, at the end, include language that you can't just go and assign the deed via quit claim or other mechanism, without notifying the lender. This is usually a paragraph titled "TRANSFER OF PROPERTY OR A BENEFICIAL INTEREST IN BORROWER" and is usually found in the Mortgage. The lender is entitled to accelerate the Note if the law allows them to do so, unless you notify them and they chose to allow an "assumption" of the debt.

Otherwise, people could just get mortgages and then just QC the ownership to a relative or someone else and default and the lender would lose their security interest (the property encumbered by the Mortgage) which is securing the debt (the Note).

[Mensa1]

Doesn't a quit claim require input from the lender? If that is the case then why would the lender allow the home owner to file a quit claim to an LLC shell company? The LLC would have no interest in the property from a legal standpoint so how could they be used as the owner in a quit claim if the original lender never gave permission?

NO, there is no requirement to get your lenders acceptance before transferring property to another. It may violate the terms of the mtg but keep in mind here the OP is trying to get the lender to speed up foreclosure.

Please read your security instruments (Mortgages) and your Promissory notes (Note). Almost all of them, at the end, include language that you can't just go and assign the deed via quit claim or other mechanism, without notifying the lender. This is usually a paragraph titled "TRANSFER OF PROPERTY OR A BENEFICIAL INTEREST IN BORROWER" and is usually found in the Mortgage. The lender is entitled to accelerate the Note if the law allows them to do so, unless you notify them and they chose to allow an "assumption" of the debt.

Otherwise, people could just get mortgages and then just QC the ownership to a relative or someone else and default and the lender would lose their security interest (the property encumbered by the Mortgage) which is securing the debt (the Note).

Come on here justbroke. The transfer may violate the terms of the mtg but the remedy of the lender is to foreclose. That is the object of this entire thread anyway, now to get the lender to foreclose sooner.

But, these kind of transfers happen all the time even when you aren't trying to motivate the lender. Yes, it violates the terms of the mtg but so does missed payments. There is NO requirement to get your lenders permission before transferring a deed; warranty or QC.

[justbroke]

NO, there is no requirement to get your lenders acceptance before transferring property to another. It may violate the terms of the mtg but keep in mind here the OP is trying to get the lender to speed up foreclosure.

You write that there is no requirement, then say that you violated the terms because there is one? That's just being disingenuous. I'm trying to not have people believing that they can, with impunity, just QC a property to their lender. A requirement, by definition is one where you agreed to certain terms in consideration for some service or property. A requirement doesn't disappear simply because you don't have to abide by it.

Come on here justbroke. The transfer may violate the terms of the mtg but the remedy of the lender is to foreclose. That is the object of this entire thread anyway, now to get the lender to foreclose sooner.

No. Have you read one of those paragraphs? The remedies are assumption, acceleration, do nothing, or foreclose. Tell me 5 cases where a debtor QC'd the property on their own accord (not under some Deed-in-Lieu agreement), and was successful. I'd prefer Florida cites, but I'll take them for any State. (Do not use the reverse foreclosure that HOA/CAs are enjoying in South Florida.)

But, these kind of transfers happen all the time even when you aren't trying to motivate the lender. Yes, it violates the terms of the mtg but so does missed payments. There is NO requirement to get your lenders permission before transferring a deed; warranty or QC.

In my State, the person who is receiving the interest in the property, must be a party to the QC. Maybe in your State there doesn't need to be consideration or any want or desire to have the property. Otherwise, I'd recommend everyone QC their homes to the President or at least the Secretary of the Treasury. I'm not saying that people don't QC with a mortgage. Their intent is NOT to give it back to the lender. We are talking specifically about QC'ing it to the lender when they haven't even asked for it. In all the States that I reviewed this in, consideration is required and the person receiving the benefit of the Quit Claim... must actually desire it and the consideration actually given to the transferee.

Sorry, but I'm more a strict constructionist and by your logic, I can go kill people because there's NO requirement that I can't kill people... only a punishment if successfully prosecuted. A QC without consideration is futile.

[Mensa1]

You write that there is no requirement, then say that you violated the terms because there is one? That's just being disingenuous. I'm trying to not have people believing that they can, with impunity, just QC a property to their lender. A requirement, by definition is one where you agreed to certain terms in consideration for some service or property. A requirement doesn't disappear simply because you don't have to abide by it.

No. Have you read one of those paragraphs? The remedies are assumption, acceleration, do nothing, or foreclose. Tell me 5 cases where a debtor QC'd the property on their own accord (not under some Deed-in-Lieu agreement), and was successful. I'd prefer Florida cites, but I'll take them for any State. (Do not use the reverse foreclosure that HOA/CAs are enjoying in South Florida.)

In my State, the person who is receiving the interest in the property, must be a party to the QC. Maybe in your State there doesn't need to be consideration or any want or desire to have the property. Otherwise, I'd recommend everyone QC their homes to the President or at least the Secretary of the Treasury. I'm not saying that people don't QC with a mortgage. Their intent is NOT to give it back to the lender. We are talking specifically about QC'ing it to the lender when they haven't even asked for it. In all the States that I reviewed this in, consideration is required and the person receiving the benefit of the Quit Claim... must actually desire it and the consideration actually given to the transferee.

Sorry, but I'm more a strict constructionist and by your logic, I can go kill people because there's NO requirement that I can't kill people... only a punishment if successfully prosecuted. A QC without consideration is futile.

You simply aren't grasping the concept here. I am not talking about QC to your lender, I am talking about setting up an LLC that you are a member of and deeding the property to the LLC. Keep in mind what this thread is all about, trying to rid the homeowner of the liability of a city's claim since the mtg is defaulted and the lender isn't foreclosing; hence the City is coming down on the owner of record for potential fines or enforcement of repairs. The owner isn't even living in the property and wants the lender to finish things off and they haven't.

you can read all the mtg clauses you want, including the clause that says you need to make your pymts on time too, but people violate the mtgs everday, don't they. So by transferring the QC deed into the LLC now the owner is the former owner and the new owner is the LLC. Let the city come after the LLC for a while. Again, keep in mind that this is a temporary solution.

However, I have used this technique to transfer deeds into LLC's for the purpose of asset protection. Yes, it is a violation of the terms of the mtg, but it has been done many times. I would suggest that you go back to the top of this thread and re-read the thread and what has been said to date; it works and makes sense.... and to heck with what the lender says in their mtg, especially when you are trying to get them to finish off their job of foreclosing on the property, and they won't.

[justbroke]

I would suggest that you go back to the top of this thread and re-read the thread and what has been said to date; it works and makes sense....

You changed the topic. This entire thread was about forcing the lender to foreclose, hence the title "Speeding up Foreclosure".

This thread was not about creating a shell LLC and attempting to shift liability on the LLC. Which, by the way, if it is closely held (single member) will have it's own problems. Nor does this shifting of "fines" and such to the LLC, speed up foreclosure by the lender. It's an entirely different topic and I was staying on topic.

Too much of a risk.

[Mensa1]

You changed the topic. This entire thread was about forcing the lender to foreclose, hence the title "Speeding up Foreclosure".

This thread was not about creating a shell LLC and attempting to shift liability on the LLC. Which, by the way, if it is closely held (single member) will have it's own problems. Nor does this shifting of "fines" and such to the LLC, speed up foreclosure by the lender. It's an entirely different topic and I was staying on topic.

Too much of a risk.

What do you mean I changed the topic. The OP asked of a way to deal with the problem. The problem is his client are being hounded by the City since they are still the owner of record. The Atty was asking for ways to speed up the lender on foreclosure. Well NO, there is NO way to do that but I have an answer of how to eliminate the city from hassling the owner, and that is change the owner of record.

Too much risk with SM LLC? Not a valid argument for this discussion. we are talking about forming a shell company that would take title to the company and who the heck cares what happens from there. It is like cutting a skiff loose and sending it out to sea, we don't care if it sinks or what. Same with the LLC and it's corpus.

Sorry justbroke, if you don't like the concept, fine. Keep in mind we are talking about folks who just finished a Ch 7 here. If you don't want to use the concept fine. Then come up with another answer to the problem. I came up with one here by using the LLC, and NO, I didn't change the subject either. It solves the problem of the OP.

I'm done.

[justbroke]

Sorry justbroke, if you don't like the concept, fine. Keep in mind we are talking about folks who just finished a Ch 7 here. If you don't want to use the concept fine. Then come up with another answer to the problem. I came up with one here by using the LLC, and NO, I didn't change the subject either. It solves the problem of the OP.

No, I don't like the concept and there are more issues than merely forming an LLC and transferring title.

The original poster asked "Anyone figured out a trick to get them to take the house back ?". Not what shell corporation I would set up to get the lender to take the house back.

While your shell game could work, the overwhelming majority of folks on this board are interested in things that are not complex, don't require forming a corporation, filing QC claims to a shell company, and then sitting back and watch the fireworks. As a matter of fact, the original poster never came back and validated that they wanted this scheme that you have come up with. This is why I try to stay on topic of what the OP asked for. Sure, threads drift, but I always attempt -- and not always successful -- to stay on topic.

I will continue to attempt to provide practical solutions to common bankruptcy issues.

[Mensa1]

While your shell game could work, the overwhelming majority of folks on this board are interested in things that are not complex.

You might wish to take note that the OP was an Atty. I would give him credit at face value that he could 1) understand the use of an LLC, 2) form one without much difficulty.