Legal Watch - Notes From C.A.R. Board of Directors Meeting
Here are a few notes on legal issues from the California Association of Realtors Board of Directors meeting in Sacramento on June 5, 2008.
REO and vacant properties are being rented by crooks. They collect the first and last months rent plus the security deposit and then skip town.
Some cities are cleaning up the REO properties and attaching liens against the title.
A lawyer group in the Monterey area is making offers to purchase short sale properties from the owners and promising to help them. They turn around and rent the property back to the owners for three years. The owners are offered to purchase the property at the end of the lease term or get a percentage of the profit when it is sold.
Some banks are requiring the short sale sellers to sign an affidavit that they were truthful in their original loan application and thus giving the banks the rights to go after them.
Watch out for REO addendums that give the unilateral cancellation rights to the lender up to the closing without cause.
Buyers should upgrade their title insurance policy when purchasing REO property.
In San Diego, a company is promising homeowners to rescue them from foreclosures by the use of "Land Grants". They are charging $10,000 to each homeowner and having the properties transferred to their names. After the transfer, they rent the properties back to them.
Some agents are charging the homeowners up to $2,000 in cash to help them with their short sales, foreclosures or loan modifications....watch out!
Some homeowners associations are charging from $250 to $1100 to produce the HOA documents.
Scam artists see the "NOD" as an invitation to come out and take advantage of the sellers in trouble.
When selling a home as a short sale, the owner should seek legal and tax advice (capital gains, phantom tax on the debt forgiveness, recapturing the depreciation and other possible issues),
A law firm up north is purchasing recourse 2nd trust deeds that were wiped and going after the borrowers.