Speeding Up Foreclosure

[justbroke]

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.

I didn't know that the OP was an attorney as he has no disclaimer -- although that's not a requirement to post here. Must be new to the whole thing then. We don't get many attorneys here asking questions, but we do get some.

I do see from the posting that it's written in third person and references "client". We treat everyone the same here. Attorneys always welcome. Not too sure about Trustees though.

[Mensa1]

Dead giveaway; the screen name is: lodibklaw

You see justbroke, I actually read these posts, and think about them before responding. - *)

[justbroke]

Dead giveaway; the screen name is: lodibklaw

You see justbroke, I actually read these posts, and think about them before responding. - *)

Well, I could just change my username to to BKLawGuy. Doesn't make me an attorney. I still wouldn't offer that type of opinion, but that's just me, as you know. I'm a RCA person. I'll find the RC and fix that, rather than band-aid a symptom of the underlying problem. I think that's our difference.

Would your LLC shell game work to confuse the municipality for some time, to defer getting notices or fines? Yes, I'm almost sure it would. However, in the end, it didn't fix the problem or answer the question... how do I speed up the foreclosure process.

I'm not trying to quash your opinion, because all opinions count here. I just wondered how it answered the actual question posed.

[Mensa1]

Well, I could just change my username to to BKLawGuy. Doesn't make me an attorney. I still wouldn't offer that type of opinion, but that's just me, as you know. I'm a RCA person. I'll find the RC and fix that, rather than band-aid a symptom of the underlying problem. I think that's our difference.

Would your LLC shell game work to confuse the municipality for some time, to defer getting notices or fines? Yes, I'm almost sure it would. However, in the end, it didn't fix the problem or answer the question... how do I speed up the foreclosure process.

I am a problem solver. What was the problem in this case...? No, not that the lender wasn't foreclosing, the problem was that the owner of the property is "at risk" with the city. Sooooooooo, my LLC would fix the real problem and the folks are no longer "at risk" for issues that exist on the house.

The reality is they could give a hot one as to how long the lender takes to foreclose, they just don't want any financial downside from the bank ineptitude. The LLC accomplishes that, less the cost of set and transferring of a QC deed.

Problem solved for everyone except justbroke. I'll take it. The net-net is, not everyone here has to accept or agree; take it or leave it. It all pays the same to me.

[BCA2009]

I don't want to get into the debate between Justbroke and Mensa, but I do know that it easy to set up a Corp in FL. Can be done by anybody in a couple of hours and about $25 if I remember correctly. I did one a few years ago for a short term solution to a problem, then closed it about a year later. The only down side is you have to file a Federal tax return (no state return required in FL). If you have no activity in the corp. the tax return is pretty easy also. If you can file a BK pro se, you can easily set up a corp and file the tax return.

[justbroke]

There's no debate. I just think it's not so simple and doesn't address the core issue of these Banks not foreclosing. In the long term, this is just a temporary band-aid. Perhaps it will stop the phone from ringing, but not certified letters to the Registered Agent from the City Attorney.

For Florida, yes there's no State required tax "return", but you do need to file an Annual Report with the Secretary of State or your Corporation will be dissolved. Also, there's about a $150 fee to file the report in Florida. (If you don't file it on time it goes to like $500 or so.)

I used a company to do all my incorporation and have shares issued and corporate seal, etc. I don't remember what my total cost was. The actual State of FL fee for an LLC is $100 to register. However, it takes a little more than just paying $125 if you want to do it right. My cost was $500/year with the report and the registered agent.

[BCA2009]

It costs $70 to create a corp in florida, if you do it yourself. For the purpose that mensa was describing, you could desolve the corp before the annual report is due for $35. there is no cost to get a federal EIN.

You can be your own registered agent. This is only designating an "official person" and address to be responsible for correspondence with the state.

I'm not recommending the path that mensa is suggesting, but stating that it is not hard or expensive to set a corp for a short term purpose in Florida. It may be cheaper in other states.

[justbroke]

It costs $70 to create a corp in florida, if you do it yourself.

Not for an LLC. The fee is different for an LLC and it requires both the registration fee of $125 and a "required" registered agent fee of $25 (check SunBiz). In the end, it's cheaper to let the company automatically dissolve rather than pay $25 fee to file articles of dissolution.

I'm not recommending the path that mensa is suggesting, but stating that it is not hard or expensive to set a corp for a short term purpose in Florida. It may be cheaper in other states.

Which I would say is constructive fraud because the sole purpose of creating this shell company was to defraud the City/Town of revenues from fines or shielding the true offender. But that's another story for another forum discussion. (Mensa didn't write that it would be temporary so I don't asses the fraudulently created LLC on his hypothesis.)

[Mensa1]

Which I would say is constructive fraud because the sole purpose of creating this shell company was to defraud the City/Town of revenues from fines or shielding the true offender. But that's another story for another forum discussion. (Mensa didn't write that it would be temporary so I don't asses the fraudulently created LLC on his hypothesis.)

justbroke watched too much Perry Mason as a kid. Forming an LLC is not fraudulent, no matter how you slice it. You are arguing points here ad nauseum, that you nor anyone else could prove if you had to. If I formed an LLC, transferred title to a property that I personally owned, conveyed QC deed to the LLC, it is entirely my legal right to do so.

The lender may not like it and in the terms of their mtg they have a remedy for that. The City may not like it, but my guess is they wouldn't know nor care... Where are you coming off with this fraud allegation>? Preposterous.

[justbroke]

justbroke watched too much Perry Mason as a kid. Forming an LLC is not fraudulent, no matter how you slice it. You are arguing points here ad nauseum, that you nor anyone else could prove if you had to. If I formed an LLC, transferred title to a property that I personally owned, conveyed QC deed to the LLC, it is entirely my legal right to do so.

Please re-read what I wrote (and I never watched any Perry Mason). I wrote that what you, Mensa, specifically wrote about, I wouldn't consider fraudulent. In case you missed it, here it is...

(Mensa didn't write that it would be temporary so I don't asses the fraudulently created LLC on his hypothesis.)

I wrote that, to create an LLC, solely to change ownership and then dissolve it intentionally, for the sole purpose of avoiding fines and fees from a municipality, that's different than what you wrote about and advocated. I was trying to distinguish the two, but you don't seem to.

Where are you coming off with this fraud allegation>? Preposterous.

Re-read what I posted and take careful note. I wasn't trying to argue with you or bring up your shell LLC to distract the creditors (namely a municipality). My post was very specific and even put a disclaimer around what you wrote about and that what I was writing wasn't addressing that at all.

[BCA2009]

Not for an LLC. The fee is different for an LLC and it requires both the registration fee of $125 and a "required" registered agent fee of $25 (check SunBiz). In the end, it's cheaper to let the company automatically dissolve rather than pay $25 fee to file articles of dissolution.

Which I would say is constructive fraud because the sole purpose of creating this shell company was to defraud the City/Town of revenues from fines or shielding the true offender. But that's another story for another forum discussion. (Mensa didn't write that it would be temporary so I don't asses the fraudulently created LLC on his hypothesis.)

It's 70 to form a Sub S, which is what I created. I had it active for less than one year. It served it's purpose. And I dissolved it. I filed one tax return and wasn't required to complete the annual report.

I don't see why a sub S wouldn't work just as well as a LLC for this purpose. As far as the fraud angle, the city would still be able to go after the LLC/Sub S for the fines. They could still attach a lein on the property. It would just be in a different name.

I have dealt with numerous Corps that were set up for the sole purpose of buying investment property. You set up a Corp and contribute the funds to it, then purchase the property. The reason to do this is that you can sell the corporation multiple times without have to pay doc stamps and closing fees each time you sell it. The corporation could be active for months or years.

Under your theory, I guess we would be commiting fraud by denying the clerk of court their taxes on the sale of property.

[justbroke]

My S-Corp was set up to handle my real estate as well. I don't know what the difference would be either, with pass-through income... using one form over the other. But I'm no attorney specializing in business structures.

Under your theory, I guess we would be commiting fraud by denying the clerk of court their taxes on the sale of property.

Not at all what I was getting at. I don't know why if you do anything to hinder a creditor from collecting it's not fraud. If you specifically create the LLC to only assign real estate to it, only to then dissolve it with the sole intent of "hindering" a creditor from collecting...

I see a distinction, and perhaps there isn't none. Suffice it to say that if I were -- and I'm not -- the City Attorney... I'm sure my boss, the City Council or Mayor, would love for me to find and hunt down revenue where the citizen purposefully hindered the collection of fees and fines. HOAs are really good at this... don't see why a municipality can't be.

I am not against LLCs owning property. I'm not against transferring your assets to an LLC, S-Corp, Partnership, or any person. Sheesh, on my investment properties, all utilities were in my S-Corp name. But, I did that from the start, not as an attempt to evade something.

My post merely stated that shuffling property for the sole purpose of hindering or delaying collection from a creditor, is not a good thing. Will the City Attorney come after you? Probably not.

Edited to add: I would really love to hear how this works throughout the entire process. I understand all the LLC/S-Corp creation and QC stuff... been there, done that. My question is specifically on the fallout created from hindering the city's collection. Now, I would venture that I would tell the city to just foreclose on the property themselves. That would be more prudent. If they don't, then if I did the LLC thing... what fallout could come? What would I do if challenged by the city's attorney? What happens to the "old" fines? Is this different if fines attached to property or to a person, in that municipality? Or do I just ignore anything from the municipality at that point, and just hope they'll go away? What stops the municipality's attorney from filing a criminal/civil complaint against the LLC, and maybe its members, for code violations, fees, and fines? How do you defend that? Do you just ignore it, and dissolve the LLC, and just go hide?

[BCA2009]

Justbroke, I follow what you are saying if you are "hindering" collection from a creditor, although I don't think it rises to the level of seriousness that I feel you are implying. I would have no problem doing this. In this situation, I don't really consider the City a creditor for one thing. I never agreed to the charges/fines. So I wouldn't consider them a creditor. And I honestly think the Bank, who should have already foreclosed, is the one truly responsible. Therefore I would have no problem delaying/obstructing/hindering the city from collecting from me or hasseling me.


I have read in other posts about "hindering Collection of a Debt" being fraud. I know there are specific things that would be considered fraud. Like certain transfers of assets in an attempt to hide the asset. But I don't think you can use the term "hinder" and equate it with fraud in any way.

Virtually everything we do up until the moment we file BK is hindering collection of a debt. Not answering the phone, Changing our phone number. Playing the loan modification process to delay foreclosure until you file BK. Counter suing in order to buy time. Responding to motions on to buy time.

I could go on and on. I believe as I'm sure you do also, that we should utilize every legal option we have to better our on situation.

I gues we just have a difference in opinion of what is legal/illegal.

I would also state that there is a big difference in violating civil rules vs criminal laws. I would never suggest purposefully violating criminal law. However, there are times when it could be worhtwhile to potentially violate civil law. It happens all of the time in contract law. You take a position on an issue, and wait to be sued. Hoping either the other party wont sue or that you can win in court or settle for better terms. Maybe this isn't right but it is the way our system works.

As far as city zoning ordinances go, I will admit I have broken them before and don't care. For example, in my city any plumbing work requires a permit and has to be inspected by the city when completed. I remodeled a bathroom and used an "handyman" down the street that was looking for some work. We didn't pull a permit or have it inspected. I violated the city code, but I sleep well at night.

[justbroke]

I agree with what you are saying. I like the hindering by not answering a phone call.

What would my defense be against the City? I don't think there's an affirmative offense or defense, but what do I say? Do I say that it's the Bank's fault for not exercising their right to foreclose, when they have no legal obligation to do so? Trust me, I'm not too concerned about the whole LLC and shifting thing. I'm concerned about the repercussions and whether you would have an affirmative defense... or just a defense based on the lender should have done (a) and the lender should have done (b) so it's not my fault. I think this is much different than not answering the phone.

I would absolutely be overjoyed if we found a way... even if we doesn't include me.. to force banks to foreclose or otherwise take over properties that the debtor no longer wants. I'm just tired of speculation. It took from October 2007 until October 2009 for my lender to foreclose on my sole remaining investment property after I "surrendered" it in bankruptcy. No reason it should have taken that long. I had even agreed to Deed-In-Lieu, QC and a whole host of other things to expedite the transfer. No takes. I did get called by the city for violations, but when I told him I surrendered to the bank, he said they wouldn't call anymore, and they didn't! Perhaps my city is nicer than the original poster?

[BCA2009]

What would my defense be against the City? I don't think there's an affirmative offense or defense, but what do I say? Do I say that it's the Bank's fault for not exercising their right to foreclose, when they have no legal obligation to do so? Trust me, I'm not too concerned about the whole LLC and shifting thing. I'm concerned about the repercussions and whether you would have an affirmative defense... or just a defense based on the lender should have done (a) and the lender should have done (b) so it's not my fault. I think this is much different than not answering the phone.

I think in this situation you are overthing the defense thing. I believe all we are trying to do in this hypothetical case is delay long enough for the bank to foreclose and hope the city puts a lien on the house. I agree at the end of the day if the bank never forecloses, eventually you may have to pay the fines and maybe interest. But I wouldn't be worried about any criminal charges. I would just hold out until I was backed into a corner and then pay the fine.

Obviously you would have to consider the cost of just fixing the code issues vs. trying to delay.

I asked a question in another thread it no one responded to it. Maybe you know the answer. What is stopping you as the owner (of record) from purposefully damaging the property. If you have been discharged in BK, you no longer have an obligation to pay the promissary note.

The mortgage is still in effect, which I'm sure requires you to maintain the property, but what real legal recourse would the bank have?

Basically, could you blackmail the bank into foreclosing by threatening to damage the property? Would this be illegal and if so why?