OfflineFirst, please forgive me for such a lengthy post, but I wanted to capture each and every word my RE agent wrote to me in my email:
"Also, I have some information that I wanted to go over with you that I just today found out about. I was talking to my escrow person at First American Title, and we were discussing what I had going on and I brought up that we should have some deals for her soon with your offers. We were discussing the reassigns/simultaneous closings, and she gave me some information that was very alarming as I want to ensure that you are completely taken care of and nothing can come back on you with these processes.
She mentioned that the banks are really starting to look into these types of transactions where there is a reassign or simultantous close. The reason being, the banks are finding this to be fraud as they feel that they sold the property to you, as the investor for much less and then the end buyer pays much more, which in turn creates an excessive profit to the investor. The banks are actually beginning to put clauses in their escrow instructions that include verbage such as watching the title for 60 days, or an addendum must be in place as to what all the parties are purchasing the property for so the bank is aware of what you are selling the property for to the end buyer. My escrow officer also informed me that the title companies are not willing to close these anymore as this has become a very serious problem with the banks and all cases are looked into as fraud, due to the excessive amount of profit the investor makes on the deal. Basically, this problem initiated as the banks fell the buyer could have come directly to the bank to purchase the property, so the banks are loosing out on more money. Even though there is disagreement, as the buyer would not have been there if it was not for the investor, the banks are pursuuing this fight and winning. The idea that rather then a large profit, the investor sets it up as a finders fee amount vs a large profit amt. The finders fee is something like $5,000. The issue with this is, that there are strict guidelines as to that border lining the need to have a real estate license.
After I had this talk with her, I have spent all day researching with several title companies and my principal broker and I am not able to find any title company that is willing to close these deals due to the potential for fraud allegations. This was not the news that I wanted to pass to you, but you are very important to me and I want to make sure you are protected and I am as well from these allegations.
So, please let me know if there are any title companies that you know of that are willing to close these and I can do some more research on that. Also, I strongly suggest consulting an attorney to see what they would suggest on this. The regular flipping of properties is completely fine still. The only thing would be to keep any receipts of repairs done to the property, so that we can show this is the reason the value is much higher when we sell it.
Some possibilities may be to purchase the property under a regular loan with your name, do a lease option for just 3months and sell it to them at that time. If you have any other ideas that may help this, just let me know. I am still kicking around some ideas with my broker as well to try to get a solution that will make sure you are covered.
For now, I think we need to address this and see what we should do. Please let me know your thoughts, I know this isn't what you were hoping to hear, but please remember that as your Realtor, I would not be doing you any help to not relay this information to you. I care too much to have something come back and bite you after a transaction. Let me know what you think and we will figure this out. Thanks again!"
Can anyone help me with how do I come back with an answer to address the likes of my RE agent and her escrow agent???? Thanks!
The banks are mad because they were greedy in allowing people to get homes they cant afford. Now there greed has back fired and now they want to try and control what people do with there properties that are purchased from them. I see it like this, if I buy a house who the hell is anybody to tell me I can't sell it, flip it or whatever. Thats there loss and they have to deal with it. I don't feel they have that power nor should the government have the right to tell someone what to do with there home.If I payed for my house, get out my face. Further more what these banks did should be fraud to create all kinds of different kinds of loans to keep people in debt and create these loans where initially you are not paying down the house but in fact paying back there interest only. Now they want to fight because they screwed up and lost lots of money. Not our problem. The same way all these people cant afford to pay for there homes and the banks have no qaulms about taking them back and leaving people homeless because they didnt get there money. So why should we care if they get there money. They should of thought about all of this before they decided to rip people off and set people up. THe banks can go to hell. Sorry folks, really ****ed off. They have the audacity. Alot of things they do should be illegal but thats not addressed. How ever the banks want to play if they dont want to sell the homes, they can keep em and then see what happens when they have a bunch of homes noone is willing to pay what they want for them.They are gonna have no choice but to sell them. Now they want to do things the traditional way. They want to get back to having 20% down is mandatory. Where that should have stayed the case or even maybe 10%. They didnt care that people really couldnot afford to pay for these houses, which I thought was the whole point of having a banker or whoever to figure out your credit, employment status, debt and whatever else,to see oif you can in fact afford this house. and if it didnt even out, you were denied the loan, point blank. That way people would go and get things in order, save money and try again when they were more stable and can afford it comfortably. These banks are playing a dirty game and as soon as all plans bomb, everybody wants out. HAAA.WHen they are the cause for this so called receesion. PLease. Trying to say its fraud is insane. Because thats how all business is run. You buy low and sell for a higher price to make a profit. Real estate is a market of goods that get sold and bought just like any thing else we use. o if thats the case everyone is committing fraud. Not a legitimate argument to me. Now we will see the contradiction and hypocrisy fat cats can pull off when its them thats jammed up. Now its fraud, isnt that ironic how its fraud because there plan sunk like a ship. These people can go some where. If I buy sneakers low and someone is willing to pay me more for them. Nike hsa no say so in that, because they are now mine,Nike does not own them anymore.
I got my mind made up.....
www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)
Though I share your feelings towards banks, if the title companies will refuse to do assignment deals because they are afraid of the banks and what might follow, then we are really in a pickle, don't you think?
-- TIME IS A TERRIBLE THING TO WASTE, SO STOP WASTING IT --
Sir
Your post is good information of just maybe conventional loaners
have to consider there definition as to what is positive to a negative
when it comes down to there loaning practice! and i love the part
about title companys...You have to respect the fact these title CO.'s
assure you that the title is what it is...So if you happen to try a
And/Or assigns,AND get turned down...There are only doing there job
as a title company,Everything must be apparent!
Then again, What you do not know...Does not hurt you!
Randy
I am looking forward to the responses you get from veteran investors.
I have so much to say, I am holding back, Thank you for the info, it annoys me to no end though! It is disturbing.
Lets all stand back and watch the investors with money to invest in this market get out there, find the great deals and negociate with the banks to pay their asking price! It will never happen of course and then the banks will come looking for us to help them out! They can always say no to the offer, after that they should have no say in what happens to the property.
There are amazing people on this site who will give amazing advice we are all working for a WIN/WIN/WIN aren't we?
Y'know if David sells me red kite for $3 coz he wants money to buy gum, "I'll give you the money tomorrow at school" you say.
A deal is struck!
On the way home you run into Josh who says Ohhhh! I ALWAYS wanted a red kite, I'll give you $100 for it!
Whaddyagonnasay?
"I can't sell it to you for $100, David might get upset! ... David wanted to get rid of the kite for gum, after that it was no business of his whatsoever!
A contract is a contract, sell a property, sign a contract whether you give it away or sell it for $1m, no longer the concern of the original seller.
Having said all of that, title companies no longer willing to close is very concerning.
I agree, consult an attorney if you have one.
I am sure that the RE industry watches this site at this point, this is their business after all.
All I have to say is that if there is a title company out there willing to work with us, we are willing to work with you.
HELLO?
Maybe a window is closing here and the time to move is right now.
Easy REI friend! Don't lose it on me...NOW! YOU are smarter than that!!!
It is never about what they do, More important what you do.I mean no
disrespect to you! I understand you got to let it out sometimes...
I think you just let it out, Can will go back to doing BUSINESS!
Randy
I got my mind made up-------!!!!
You are better than that! Then again, Let it out. It is never really
about the people moreover the dollar!Get your dollars and i promise...
You can do whatever you want with yours! The first thing you do is...
Loan me some money!!!!!!!
Randy
2birds--------1stone
"MAKE YOUR ACTIONS COUNT"
I would like to hear Deans take on this....
Maybe he can talk about it in his monthly conference call.
Yeah I vented a bit. But I do know that we have ways around the particular and/or/assigns verbage. Title companies are doing there job. You are right about that and are helping to keep us from getting into a jam in turn. But they do accept other ways of doing this kind of transaction. Using the right verbage. The banks don't want the and/ or assigns in contracts so we must use the other options available. And we can do these transactions through our attornies.. So Randee I will get back on track and get back to business. All this is because everyone is in a frenzy and fretting about the unknown outcome to all of this. This is like the craze when the gas prices went up. And when they came back down everyone simmered down and all got back to normal over time. Companies were losing it. Just as the banks are. Bet they'll will change alot of loan ramifications now. No more leniency now. But us investors still will do our thing.
Kingjuss,
I got my mind made up.....
www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)
I think it is all a bunch of cr#p! Banks have been trying to avoid the and/or assigns since homes started going into foreclosure. This is nothing new. The title companies are getting their information from the banks. It's not fraud, it's not illegal to assign your interest in a property. Mostly, the banks are greedy and ticked that investors know the loopholes. Stop listening to your agents and to your title companies. If they don't want your business then there are 100 other companies that do. Be creative and get it DONE! Use a land trust or purchase the property in your name and add your end buyer to the title. After escrow closes quit claim the property to them. What is the bank going to do? They received their money for the home.
Kim, we completely agree. What's more, there ARE other investors using and/or assignee RIGHT NOW, every month! So, if it's illegal or fraud or whatever, and if NO title companies are willing to do it, then how are some investors doing it???
I would love to hear what Anita has to say about this! 
This seems to be an area all of us have been frustrated in. But there are ways around it. The easiest I have found is just plain buying the property (cash is king, but not the ONLY way, and it doesn't have to be your own), and then reselling it. If a person could find a system for buying w/ private or hard money, have a tenant/buyer move in with a balloon payment due after the seasoning period (3-6 months), this would be such a clean process. yes, there are some additional closing fees, but that is minimal. The house I closed on yesterday, my closing costs were only $161. Small price to pay for some peace of mind.
I would SO much like to see an actual purchase agreement and settlement statement from a BANK-OWNED property with the and/or assigns actually closing, that I would be willing to PAY someone to show me. Seriously. I believe they exist. I would just love to see one for myself.
There are so many REOs out there at such great discounts available, but remember CBR's(Matt Larson's) thread in here about the easiest way to do assignments.
http://www.deangraziosi.com/node/11943
And Dean even included Matt's advice verbatim in the new book (pg 165), so don't forget to keep your eye on the prize of actually making this work. Make sure you are choosing the best route (or at least trying a number of them) to make sure you don't end up beating your head against the wall. For now, the banks' way of doing things is just beyond reason. So keep working on those REOs, but don't forget the other options.
Good luck to all!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
You CAN NOT sell these short sales to FHA buyers either! This we learned the HARD WAY!
NEXT WEEK on Wednesday, our http://TheCashProvided.com Platinum Group will have a Title company on the call that WILL be discussing these VERY issues! Folks, the markets are changing RAPIDLY and the banks are doing STUPID things. If you do NOT have a way to keep your finger on the pulse, you will be lost out there.
Hope this helps.
Have an AWESOME Decade!!!
your friends @
http://TheCashProvided.com
May I ask how do you define the difference between a "simultaneous closing vs back-to-back closing? Thanks!
Where on the other hand, Back to Back is JUST that A sells to B, B sells to C.
Hope this helps!
Have an AWESOME Decade!
Thanks for the clarity.... because so many investors use both terms "simultaneously" NO PUN intended!!! LOL
Have you closed any deals with using the land trust or quitlaim deed methods? I am trying to work with my atty on these strategies and wanted to know if you (or anyone else for that matter) has had any success. As Matt larson says, title companies only do the title search they are not lawyers so we need attys that deal with real estate transactions to be knowledgable with these methods (which seems hard to find one). That is why I am asking for everyone's benefit.
Neil
Kimmy J
I think it is cr*p too!
However, I think that the first step here is to check with title companies and see if they are willing to do double closings or not!
From a new REI - First things first. Thank you to all of you who contribute your expertise and knowledge in the many different related fields of Real Estate. Really - Thank you
With that said - here is a very quick version to my thought for all to ponder..
I've read only 3 books my whole life which includes Dean Graziosi "Profit from real estate right now!"
Three real life situations of mine - have been the only 3 reasons to read 3 books.
Situation 1:
Gambling (lost it all and then some) Felt like I didn't even deserve to be here anymore. Positive out of situation. That experience and all that happened in between. Lead me to my Defining Moment in my life. I chose to better myself.
Situation 2:
Finance & Credit: It's really, really, tough right now.
Situation 2 was a direct result of our economy and I accept all responsibility for not being able to create a reserve (Emergency fund). I work the hours that GREG worked...just long and want to come home and rest. The scary part of our economy, is it's just everyday living expenses I couldn't afford and perhaps many other Americans. The middle-class like me, who is borderline...need to choose right now either get wealthy or get poor as we define those 2. I chose to "Be a Real Estate Millionaire" in order to help family and friends...when they can't keep the juggling act of life.
The positive of situation 2: My wife and I grew "together". We now "both" understand the importance of savings. Sure we can't take it to our grave, but until we get to our grave...it's better and more comfortable knowing we will be prepared 20 to 30 yrs from now...when history repeats.
Financially in my life - I no longer can continue my 4 financial responsibilities. So now I choose which one will cause the least amount of pain in my families life.
The Choices:
1-Unsecured credit debt
2-Auto-loan
3-Daycare
4-Mortgage
I decide #1 - We had a car, purchased our first home in 04/2008, and we needed the other 3 in order to get to work and be thankful to bring some kind of money home. I knew by not paying my unsecured credit debt that it would impact my FICO (Fair Issac Score). But I needed the money to pay the for the other 3 choices.
So - I read book #2
In short, it was about Big name banks, lending industry, collection agencies, and then more about banks, and finally watching a documentary that was referenced by the author of book #2.
So now I understand and have the knowledge to know what I have to do, in order to do what I want to.
Thing To Ponder on...
I believe based on what I've read & watched to help my situation #2.
Government & Big Name Banks are Best Friends. Banks will continue to not like high FICO scores or business Scores. There's no money in interests and probability of default probably never and therefore no easy money. But they'll still lend to high scores and make something. What do they got to lose. Nothing really.
The trillions they make depend on the consumer with an average score and a not so obvious but still a reasonable chance of no default. Now they get their high interest rate and a good chance of Easy Money when we can't make our payments. Government will continue to make sure that children will never be educated on how to manage money and credit. The Big Name Banks are 1 out the 2 biggest contributors to government and they'll continue to keep the formula to determine the FICO and business score system a secret.
The government and banks initial plan with arm loans I guess...was to tease w/low rates and purposely lend money to people that they knew would and/or default on their loan when the rate adjusted. They keep the money they made from the "teased rate home owner", and turn around and re-sell. They expected to sale "Instantly" and make more money. But my my my have the tides have changed. Now here we are today. We the REI or actually Dean and his team. As well as all other REI's and any other professional in the Real Estate World. You all found a way to make more money from something that they created. Their plan was to benefit them, not the clever..."Think a little different" RealEstateInvestor and other professions that are benefiting. "What goes around - comes around"
The battle will continue where the people will continue anything to get ahead, provide for a family, or just to survive...and banks and government will continue to figure out how to get more money.
Perhaps if they cannot stop the "And/or Assign" to what that means to my limited knowledge. I think the banks and government will continue to allow because of rights or something, but they'll probably come up with some "Think a little different" way on how they can get more of the "Back End Profits"
I'll end with...Time is of the Essence at least for "Profit from Real Estate Right Now!" economy.
I know it was long...sorry and I seem to do that when I'm on this site. I think it's because I'm so excited and enjoying every moment, and knowing DEAN and his team are there, and all you seasoned Investors, agents, lenders, brokers, and just all walks of life...willing to give and share you knowledge to help people you've never met before...create a better life for themselves.
Thank you to all again.
Teddy Galang - Think A Little Different!
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I am still making offers, but haven't had a deal accepted yet. The land trust system DOES work, I have a wholesaler in my area (the guys lives 2 miles from me)who is raking in the money using the land trust. So, I know it works.
If you want to find title companies that do double closings, talk to Eric at www.coastal-funing.com This is all they do. They have a list of escrow companies that they work with who do double closings.
Hi Rina! We have been thinking the very same thing. The whole and/or assigns seems to have A LOT of drama surrounding it, and A LOT of problems. Since the banks don't seem to like it, we have been trying to come up with other options. Since we have no money of our own, we were thinking that we may be able to do as you suggested.
Here's our thinking: Find the right property (in an area where homes are selling well) and purchase the property with a HML (so we would have to get it around 65% FMV, since we haven't found any HMLs that loan more than that). Then we would cash-flow the property and refinance with conventional funding after 90 days (we are hearing from our brokers that a 90 day seasoning is required in CA).
Are we WAY OFF with our thinking? We talked with an advisor about it today and he said no way, that's not possible. You don't want to use a HML for a cash-flow property, even in the short term, since you have no guarantee that you could refinance. He had zero suggestions for us. He said we HAD to have our own money to do any kind of cash-flow. (By the way, this guy's negativity and lack of creative thought was EXTREMELY UNUSUAL for the advisors.)
We would really love any input and/or advice from you, Rina, or any of the successful investors out there!
Thanks a lot!!
....Christopher: Change the Title company (and if necessary the realtor/broker as well)! Scare tactic, is all I'm saying.
There are enough title companies out there that are operating nationwide, and DO simultaneous closings. And in case you have a transaction where this is not an option, be creative (as Kim suggested). Be flexible and use double closings (IF there is enough spread in a transaction to allow for the extra expense, that is).
Other options are to open a LLC (about $50 and 2 days if done in AZ, for example.... EVEN if you are not living in AZ), then make the offer in the LLC's name and sell your rights in the LLC to your buyer.
Banks have no legal bearing to call it fraud if ANYbody makes a substantial amount of money by assigning their contract at a higher price to a cash buyer. Last time we all checked this is America, the land of the ultimate CAPITALISM. And a lot of Millionaires and Billionaires in this country will vehemently disagree with the title agent your realtor quoted.
Actually.... come to think of it: If you wouldn't mind to find out who this title agent was/is... I would love to call her/him up and give him a little speech about the fact that he is probably facing criminal charges if it comes out that he informs the bank (seller) upfront on how much profit you as the investor in between are going to make on this transaction. If the bank would keep this piece of REO on their books it will cost them more anyway than they lose by selling it cheap (because they can't loan 8 times the amount that's tied up on their books --> REOs)!
So, pass on the that name to me... and I will be HAPPY to make THAT phone call! LOL
Best,
Conny
connywolfram@****
"POOR people own big TVs. RICH people own big libraries."
I am in process of buying an REO.
Talk about a lot of sleepless nights...The first offer I put in was accepted. I used Coastals letter of proof hoping I can find an end buyer quickly.
I signed the P&S yesterday!!!!!!!! I had to give the realtor a check for $3100. She wanted a cashiers check but the funds weren't available so she accepted a personal check. Thank you God!
Coastal Funding is awesome. They will give you the name and number of the national title companies to use and they will "rent" you the money to close the deal. It's completely legal.
I don't know if I'll be able to use them for my deal but it's my first choice if I can find an end buyer next week.
Check out their website:
www.coastalfunding.com
Good luck!
Susana
I like the rabbit picture you provide.I really did not know we could
advertise on this forum! Then again...There are alot of things i do
not know? Mr. bunny rabbit,State your business.
Randy
I don't follow, Randy. HUH???
I think he is talking about sunshine38's post about coastal funding?
Do you need web hosting for you REI site? Come check us out at http://hostgladiator.com
I am having trouble accessing coastal funding web site. Everytime I try, I get an error message, server error, or access denied. I found a "coastal funding group" is this them?
Someone suggested the other day not to write your name on the contract, instead to use the property address. Somehow it sounds as if is something the bank or escrow company would not allow. What is your opinion.
.....it's http://www.coastal-funding.com (Eric)
But there are other companies out there that offer transactional funding as well!
Best,
Conny
"POOR people own big TVs. RICH people own big libraries."
Hi Rina! We have been thinking the very same thing. The whole and/or assigns seems to have A LOT of drama surrounding it, and A LOT of problems. Since the banks don't seem to like it, we have been trying to come up with other options. Since we have no money of our own, we were thinking that we may be able to do as you suggested.
Here's our thinking: Find the right property (in an area where homes are selling well) and purchase the property with a HML (so we would have to get it around 65% FMV, since we haven't found any HMLs that loan more than that). Then we would cash-flow the property and refinance with conventional funding after 90 days (we are hearing from our brokers that a 90 day seasoning is required in CA).
Are we WAY OFF with our thinking? We talked with an advisor about it today and he said no way, that's not possible. You don't want to use a HML for a cash-flow property, even in the short term, since you have no guarantee that you could refinance. He had zero suggestions for us. He said we HAD to have our own money to do any kind of cash-flow. (By the way, this guy's negativity and lack of creative thought was EXTREMELY UNUSUAL for the advisors.)
We would really love any input and/or advice from you, Rina, or any of the successful investors out there!
Thanks a lot!!
5HEnterprises,
Actually, what I was thinking about was the seasoning required by FHA for my buyer. I am using private money (you COULD use a HML or other source of "cash") to purchase an REO or short-sale. This gives me the advantage in getting an offer accepted. THEN, if my end buyer needs to wait 3 months (or longer) to close with FHA financing on the property, they would become a temporary tenant/buyer, paying "rent" for the three months with a balloon payment due when their loan comes through. If you have an end-buyer with cash or some other type of financing there is no problem. Just flip the thing. I'm just thinking ahead for if there DOES arise a problem for the traditional retail buyer.
I, myself, would not use a regular HML to buy a property I meant to hold unless it was a HML loan long-term enough to be comfortable. I did find a HML in Arizona that allows 12-18 month terms. However, they charge 4 points (4% of the loan) and also 14% APR. But if you have a deal too great to pass up, I feel that this gives a decent amount of time to do something with the property. That is just my opinion, though, and the advisors have a lot of expertise. I would consider everything they say with much respect. (I'm surprised at the "negativity" though. But, like you said, don't let one individual put a bad taste in your mouth.
)
I hope that explained well my thoughts?
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Conny,
Love your saying about the poor and rich.
Someone just said to me yesterday "WOW you have alot of books!"
I was speaking to someone else yesterday that has bought two homes FSBO. Many times this woman would ask me what I was reading and I would tell her. She took what I told her and did it. I never knew.
Thanks for everyone who has posted. I have learned a great deal.
Kat
I was speaking to someone else yesterday that has bought two homes FSBO. Many times this woman would ask me what I was reading and I would tell her. She took what I told her and did it. I never knew.
Kat
Teaching without even realizing it. That is awesome! Thanks for sharing that!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
I was reading Shelia's Journal today and what she posted has to do with this thread. I hope it is OK to copy and paste part of it.
Shelia wrote:
"..... I did experience quite a challenge now that REO & Short Sale Lenders demand and disclose the "no assignment" disclosure. In such case, I did find that asking for upfront fee from the assignee has been successful. Given that REO/Short Sale lenders will call the contract void if they find assignments involve, I found that by creating an addendum to add a "second buyer" is a loop hole. This way, the seller (which in this market is usually the REO/short sale lender) will generate a revised approval and/or contract approving the secondary buyer to the contract. Since the new buyers' name is on the contract, he/she can have his/her loan documents (if financing) finance the purchase without having to do a double closing."
Thank you Shelia,
Kat