Or even before you get the Deed? ? ?
?It doesn’t happen often, but it is not unusual. ? Sometimes you get contacted right away before you get the Deed and they return your money. ?The Trustee may or may not give you the reason. ?Often it is because a bk. was filed. ? ?
? ? Other times they have sent out the Deed, you record it. ? Just recording the Deed often can involve a 4 figure expense in cities with a transfer tax. ? Often a month has gone by after recording, sometimes three months where you have already made a cash for keys deal with the occupant. ?The Trustee says “Tough shx”, we are recording a “Rescission of Trustee’s Sale.” ?We’ll send you a check for what you paid in the next 10 days.?
? ? ? ? One of our associates decided to battle. ?The attorney, who is THE expert in representing creditors in Bk. Ct. in this area and has made law over the years in State and Federal Court in the foreclosure field - decided she had a good case. ?
? ? ? ? ?As in many cases where a bk. is filed - ?There is NO automatic stay. ?That means the lender was free to proceed with the sale. ? Debtor’s who have filed multiple bankruptcies do NOT automatically have their sale stayed. ?They have to get a Court order. ?In this case, the debtor deeded off a partial interest to a new person, who filed a new bk. ? That doesn’t work. ?The Bk. Court followed the law (being that it is the number of times a property has been tied up by a bk. not the number of bk. one person has filed) - and declared there never was a Bk. stay in effect at the time of sale. ?The purchaser is entitled to his Deed.
? ? ? ? ? An old acquaintance just called about a situation described above. ?Three months after Deed recorded. ?I hope he decides to contest that. ? ?I think all you Foreclosure buyers should contest some of these?rescissions of Trustee’s Deeds. ?
End of Rant.?
Interesting points and case examples offered by Miket. As a trustee sale buyer, you are in a much better position the battle/dispute/fight back re a ‘sale recision’ if you have already received and recorded?the trustee’s deed upon sale. If the trustee opts to rescind before sending you the deed, then you’re almost certainly ‘pushing the river’ (tough to successfully overturn the rescission).?
Regarding the ‘perpetual bankruptcy’ strategy used by many to avoid foreclosure (constantly deeding and re-deeding 2% to 20% to someone in bk)… there was an interesting bit of news a few weeks back. One property I purchased, and several that I tracked, had been (or were) tied up in BK courtesy of a ‘foreclosure avoidance’ pro who ‘helped’ (<not). He was arrested by the FBI with the investigation assistance of TARP (troubled asset relief program) and charged with running a BK fraud scheme. Read here >?http://www.fbi.gov/sanfrancisco/press-releases/2013/montara-man-charged-with-running-bankruptcy-fraud-scheme
?Follow up to my own question. ? Got call this AM from agent who represented ?buyer on sale of property 3 years ago. ?It appears (just looked it up on FR & ?Trustee’s web site, that a wiped out junior lender has fcl. sale set in 2 weeks.
? ?Situation: ? Property bought under senior loan 4 years ago. ?Junior, who obviously thought they were a first, had sale set for following month. ?We knew we’d have to sit on ?property for at least a year to get title ins… 2 or 3 times we wrote Trustee ?that we had purchased property under senior and quit clouding our title. ?Never got a response - but they kept postponing the sale month by month. ?When year was up (when they would have had to renotice/publish the sale) - they faded away. ??
? ? ?Uniil at least last month! ? After agent called I went onto FR and saw a sale is set in 2 weeks. ?Went to the Trustee’s site and it appears they are proceeding under a 4 y.o. NOD. ?(Don’t see new recording.) ?
? ? ? ?I told the agent over the phone - and emailed her in bold, highlighted print - to have her office mgr. and atty. contact the title company that insured the deal. ?
? ? ?
BTW - This is the same Trustee that refused to accept a payoff in full just prior to a sale last year. The upper echelons in their office realized and acknowledged their “badness” before a Trustee’s Deed was issued. (The auctioneer had postponed the sale for 20 minutes before going to sale to get instructions. Somebody told him to refuse the payoff and hold the sale.) Most of the prospective bidders realized there would be a problem, didn’t bid. A couple did. “Winner” had money returned couple weeks later.