Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › NEHTrust question as well as advise….
January 18, 2008 at 7:45 pm #4374
It appears that I am a little stumped (not hard to do).
I have someone who I will be putting into the Gatten style trust and he has a few questions I wasn’t too sure on.
There is a hard money loan that is cross-collateralized against the property he is lookign to place in the NEHTrust. They only owe $25k on it and it is worth roughly $500k. The people on title is his Aunt and himself. The hard money lender he got the loan from that cross-collateralized this property never had the Aunt sign off on the loan being able to be cross-collateralized.
For those who I haven’t lost yet, when it is put into this trust, I know no more lawsuits, judgements, liens, etc. can be placed against the property but is this one cross-collateralized loan able to be enacted upon when only one party on title signed on it?
NOw, for the one or two who are still hanging in with me, let me know what you think. Putting it in the NEHTrust/PACTrust isn’t for the reason of avoiding this loan, it is for future protection.
Let me know.
Daniel BrucknerJanuary 18, 2008 at 8:26 pm #24339
not giving legal advice of course
how did the HML lend the money and collateralize the property without the aunt signing off? did the investor sign on behalf of the aunt to even get the funds? seemed like the HML missed an important thing of checking who’s on title.
id say no. i think the HML cannot enact a foreclosure proceeding on the aunt and the investor if they defaulted because they missed 1 of 2 owners signing off on the loan. i understand that HML lend money and if they dont get paid, they get the deed. looks like it can get ugly in court for all parties.
i’m in simi valley and im looking for a short sale professional to refer my seller leads. let me know what we can do together via EHT and short sales.
i know enough on how to do a short sale, but i dont have time to negotiate it.
pretty much WIIFM? hahahaJanuary 18, 2008 at 10:44 pm #24340
The hard money lender is the one with the problem. He could foreclose on the property if all the title holders had signed for the loan; but since they didn’t they could make his life real tedious.
When the property goes into the trust (with the parties as beneficiaries) they might want to make sure that somebody else be named as a 3rd beneficiary in that the guy and his aunt are related in business as well as familialy, and that could very possibly allow for favorable treatment of a plaintiff in court on the basis of “constructive permission” having been given by the aunt in that she knew about and never broached the issue before. The 3rd beneficiary could even be just an LLC between the guy and his aunt and/or, of course, any resident beneficiary they might put into the property.
The answer to your main concern is: Well… hmmm…that depends…
The property would be subject to foreclsoure for cause if the loan was legit; but in this case, whether its in a trust or not, the aunt might prevent a foreclosure by insisting that she was not infavor of the loan and never knew about it or siged for it…the lender would then find himself in a pile of shmoo droppings. However, on the other hand the constructive notice concept could do her in.
What’s with a lender who doesn’t know how to check title anyway? Send me his name and number…I can USE that guy! (Smooth move, Ducolax!)
BillJanuary 22, 2008 at 4:36 am #24341
THat’s what I thought.
THanks much. No need to call me tomorrow (unless you want to just chat and reminisce of times past… )
Feel free to call me or email me. I’d rather talk about the negotiation aspect of short sales outside of this great site since it is a little bit different than what is here. Or, you can just private message me at the forum at http://www.theshortsalehouse.com/forum
Whatever is easier.
I am beginning to seriously intertwine the benefits of short sales with the EHTrust methods of ownership.
Should be a great 2008 for those who are ready!
DanielJanuary 22, 2008 at 2:19 pm #24342
If your property is in California, then the Hard Money Lender provided he has a real estate license is required by statute to provide specific information on the proper forms to all the owners of the property prior to funding the loan.
Specifically the following forms are required:
RE 851a Lender/Purchaser Disclosure Statement
RE 851d Lender/Purchaser Disclosure Statement Multi-Property (Cross-Collateralization)
These forms can be found at http://www.dre.ca.gov/frm_mlb.html
If you download these forms and read through them you will understand what is required by the broker in order to make the loan.
Over the years I have found that the story from one side of a transaction is slanted in their favor and makes the other parties seem to be less then honorable. Don???t be quick to judge the merits of the transaction, be sure to do your own due diligence and determine what actually occurred.
You may be in for a surprise.
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