Any ideas about what is going on in this situation? I suspect a foreclosure avoidance scam or a set-up for a post foreclosure scam. Here is the story:
A vacant and uninhabitable house I am aiming to purchase at trustee sale had a quitclaim deed recorded on it days before the first auction date. The auction has been postponed at beneificiary’s request (quite common and probably unrelated). The quitclaim assigned a 5% interest in the house to another person as a gift. The out of state owner is deeply underwater, so there is only negative equity, quite a lot of negative equity.
The owner is part of a group of real estate fraudsters with extensive experience. They should know that the quitclaim action not only won’t prevent foreclosure and won’t save the owner’s credit rating (ha!), but would itself be grounds for the lender demanding payment in full if there were not already a NTS recorded.
My wild guess about a post-foreclosure scam is that the owner is giving a 5% share to a local person so they can occupy the house (ruled uninhabitable by local building and safety, so unrentable) to force a post foreclosure payment of key money, or somehting like that.
Anyone encounter a story like this?