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Dovetail vs. EHT?

This topic contains 2 replies, has 0 voices, and was last updated by Avatar of bmckee bmckee 8 years, 1 month ago.

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  • #6846
    Avatar of bmckee
    bmckee
    Participant

    Dovetail system claims it has come up with a ‘trust” conveyance system that title companies are good with.. and claim to be using it to close short sale transactions. I haven’t been able to find one title company in Oregon to close transactions involving sales of properties recently placed into a land trust… or transfer of BI for that matter.. but I’m sure open to referrals to title companies who will!

    Is Dovetail system somehow succeeding in these deals where the EHT fails the Title company sniff test?

    #33940

    The secret to any use of “a trust”, regardless of what organization or person creates it, is Full Disclosure. I have personally used a Simple Land Trust to “Flip” or “Flop” a property several times, with full knowledge and cooperation from the Title Company and Lender.

    I have also been turned down by the same Title Company and Lender too. They need to believe that there is full disclosure and of course every deal is different. If they think you are making too much money on a deal, they’ll most likely turn you down.

    Regardless of how you do it, either using an LLC, Trust or other entity, most Lenders, Title Companies, Realtors and State Regulators feel that “Flopping” is at the very least UN-Ethical, if not outright Illegal.

    If the Buyer’s Lender is a Private/Hard Money Lender it is really easy. They don’t care that the property is currently “in trust”. The borrower uses the private funds for 12 to 18 months and then refinances with a traditional lender.

    #33941
    Avatar of corkhorner
    corkhorner
    Participant

    I missed the meaning of ‘flopping’, on my journey.

    ‘S’plain?

    dunkashayne [who culd spell it, i don't know]

    Inevitably,
    A. Corkster

    #33942

    @corkhorner wrote:

    I missed the meaning of ‘flopping’, on my journey.

    “Flopping” is the term used by some (Realtors, Regulators, etc.) for “illegally” flipping Short Sales. In most lenders and realtors minds, flipping or flopping a short sale is illegal, period. They feel you are ripping off the current lender if you buy a short sale and then sell it to someone else for a profit. They believe you have stolen what you made in profit from the lender.

    As you may have heard, lenders have been making buyers of short sales sign an agreement that would prevent them from re-selling the property within 90 days to 6 months. This request is actually illegal itself but if you don’t sign, they won’t agree to the purchase. If you re-sell within that time frame they will prosecute you for fraud.

    Personally I don’t know where the fraud is. After all, what in the hell do they think an investor is going to do with it. Just because their Realtor sucked and wasn’t able to find a buyer at a higher price is not the investors fault, right?

    Some, especially those familiar with trusts, have suggested and attempted to use a Land Trust for Short Sales by having the property placed in trust and then sold directly to the end buyer, which I think is a wonderful idea. However, lenders are ignoring the no seasoning aspect of transfer of title to a trustee and instructing the title companies that they are not allowed to close the short sale if the property is in or has been placed in a trust. Since the trust is kept private and any assignments of interest in the trust are “not disclosed”, the lender wants to prevent investors and other beneficiaries of the trust from making a profit from their loss.

    I understand that HUD says the Flopping Short Sales without improving the property and holding title for a long period of time “is illegal”. However, I have found no such law anywhere. Some idiots believe that whatever HUD says “is law”, which we know is total El Toro Poo Poo!

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