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  • #16
    Flipping IS Illegal

    Wouldn't matter if he intended to be an aowner, and profit, or not. There
    is no law requireing that the transaction be recorded (not federally
    anyway). There are a whole bunch of "regulations" that countied,
    municipalities, and "policies" of banks, title and insurance companies, but
    no "law".

    Fundamentally, it is no different than if I sell a stock short. I don't own
    the stock. I just have a contract on stock that I borrowed. I sell it to
    someone else, without ever taking possession of the shares, and profit. The
    buyer takes possession, and I take my profit. Equal Protection applies, for
    if you allow those transactions (which is done a million times a day in the
    market) the same must apply to all property transactions.


    "Baird Spalding" <[email protected]> wrote in message
    news:v7nPa.1030$x%[email protected]
    On 10-Jul-2003, "Scott Hedrick" <[email protected]> wrote:
    According to you, I should have been recorded as the owner first. No good purpose would have been served by this since I was never intended to be the owner.
    No, you didn't INTEND to be the owner and profit from the transaction. Not the same thing.

    Comment


    • #17
      Flipping IS Illegal

      Yes. They know that *sombody* is pulling cash out in the amount 0f 30K.
      It's in the loan and closing docs. If the LTV based on the appraisal meets
      their guidleines, thats it. They know. Do they know who? No, with the
      exception of the named borrower. Do they know the real recipient? No. Is
      ti any of their business? No.


      "Baird Spalding" <[email protected]> wrote in message
      news:[email protected] ..
      On 10-Jul-2003, [email protected] wrote:
      and there's no way they're going to let some vulture make $30,000
      and knowingly finance it. There has to be deception at some level to make these deals work. It's just common sense.
      Common sense says that a heavier object will fall faster than a light object. But it doesn't work that way. Where and how is fraud involved?
      When doing a flip, or whatever you want to call it, does the bank know exactly what's going on? If they do know what's going on will they do it?
      Do
      they know that they're financing a 150k loan and the investor is getting
      30k
      of it right off the bat? A simple yes or no please!

      Comment


      • #18
        Flipping IS Illegal

        Nothing. The bank does the same thing with stocks, everdya, with me as an
        investor. It's called "margin". When I buy or sell stocks, I have a credit
        account with the bank. The bankpoines up 50% of the amount of the buy. If
        I'm selling short, they pony up nothing unless my gable doesn't pay of.
        Then they're on the hook for a portion, and they collect it from me.

        No difference.


        "Baird Spalding" <[email protected]> wrote in message
        news:a9mPa.648$x%[email protected]
        On 10-Jul-2003, [email protected] wrote:
        Some people would sign purchase agreements on condos with the right to close in the future - maybe 4 or 5 months in the future. They
        speculated
        that by then, the condo would be worth much more than they paid. So
        they
        immediately started looking for a buyer at a higher price. "More than they paid?" They didn't pay. They encumbered, but they didn't pay. If the market declined, they could back out, if it goes up, they prosper big time. Isn't there something wrong with that picture? If YOU
        were
        an investor in the bank that funded the condo project, how would you feel about it?

        Comment


        • #19
          Flipping IS Illegal

          In us.legal.self-represent Baird Spalding <[email protected]> wrote:
          On 10-Jul-2003, [email protected] wrote:
          In your jurisdictin, is there a statute or a document which requires the buyer to disclose anything and everything that the title company MIGHT be interested in? Why can't the title company protect itself, and draft documents which cover everything they might be interested in?
          Well, Florida's middle name is fraud, so maybe they're more sensitive.

          More sensitive in what way, to what? You need to explain what you mean by
          flipping.


          I'm not trying to be a wiseass, I just don't see why a buyer would have any obligation to disclose such a thing if nobody ever asks him.
          The problem is you have a house that was technically sold, but not being recorded as sold.
          I know of no jurisdiction in which it is illegal to fail to record a deed.
          Maybe you know better?

          If it was closed on, the bank will see by the chain of
          title that it was just bought.
          Why would they care? They care only that their borrower is giving them
          sufficient collateral (note that this takes into consideration many
          factors, including the state of title, which seems to be your concern).


          Even if the investor doesn't close, you have
          an assigned contract which is a smoking gun.
          Why is an assigned contract anything that the lender cares about?


          Maybe you can rewrite the
          contract so the investor isn't mentioned, but then you need a ghost, or side contract that the bank doesn't see. I see no way to use conventional financing without using deceit. If you know of a way please tell me.
          Here's one: The investor signs a contract with the seller. Then he signs
          another with the borrower. The borrower accepts a deed from either party,
          in a manner such that he has a good and clear record title.

          --
          Words are flowing out like endless rain into a paper cup,
          They slither while they pass, they slip away across the universe...
          -Lennon/McCartney

          Comment


          • #20
            Flipping IS Illegal

            In us.legal.self-represent Baird Spalding <[email protected]> wrote:
            On 10-Jul-2003, "Scott Hedrick" <[email protected]> wrote:
            A property investor's profit is not the business of the bank and doesn't need to be disclosed.
            The title company's underwriter and the bank, I suspect would disagree.
            On what do you base this suspicion?

            --
            Words are flowing out like endless rain into a paper cup,
            They slither while they pass, they slip away across the universe...
            -Lennon/McCartney

            Comment


            • #21
              Flipping IS Illegal

              In us.legal.self-represent Baird Spalding <[email protected]> wrote:
              On 10-Jul-2003, [email protected] wrote:
              Some people would sign purchase agreements on condos with the right to close in the future - maybe 4 or 5 months in the future. They speculated that by then, the condo would be worth much more than they paid. So they immediately started looking for a buyer at a higher price.
              "More than they paid?" They didn't pay. They encumbered, but they didn't pay. If the market declined, they could back out,
              No way. They signed a Purchase and Sale agreement obligating them to buy
              for a price on a date certain. Lots and lots of people got zapped when
              the market crashed.


              if it goes up, they
              prosper big time. Isn't there something wrong with that picture?
              all I see wrong is your understanding of the obligations imposed by a
              valid P&S.


              If YOU were
              an investor in the bank that funded the condo project, how would you feel about it?
              Generally, in construction loan situations, the bank needs to approve each
              P&S, or at a minimum, the form of the P&S. If the bank approved the type
              of contract you have identified, which is really just an option to
              purchase, then the bank would be sleeping in the bed that they themselves
              made.

              If, however, the original seller signs an option without informing his
              lender, he is committing fraud. The second party, who receives the option,
              and/or the third party, who intends to buy and reside there, however, are
              doing nothing wrong.

              --
              Words are flowing out like endless rain into a paper cup,
              They slither while they pass, they slip away across the universe...
              -Lennon/McCartney

              Comment


              • #22
                Flipping IS Illegal


                On 10-Jul-2003, "Scott Hedrick" <[email protected]> wrote:
                Why is it any of the bank's business what the seller does with the money? Contrary to what some people may think, *profit is not illegal*.
                They're finding out those sort of deals have a higher default rate and
                potential for fraud than the FSBO or brokered transaction. Why they've had
                their heads in the sand for so long, and now all of a sudden it makes a
                difference is beyond me.

                Comment


                • #23
                  Flipping IS Illegal


                  On 10-Jul-2003, "Satellite" <[email protected]> wrote:
                  Come on Baird. You have no idea what you are even asking and you obviously have a friend who is an idot.
                  You're right, I don't know what I'm asking. Tell me what I should be asking.
                  My friend is no idiot. She's a self made millionaire. She just can't seem to
                  think outside the box. I was hoping to get some concrete ammunition to
                  counter her beliefs. I would like to use her as a partner but she's dead set
                  against everything I told her.

                  Comment


                  • #24
                    Flipping IS Illegal


                    On 11-Jul-2003, [email protected] wrote:
                    I'm starting to get this impression as well. Baird needs to go back to his friend and find out specifically what type of transactions are being discussed.
                    I only spoke to her about it for a couple minutes. She was getting me pissed
                    so I changed the subject. But it bothered me to see someone I respect and
                    has been in the business for many years be dead set against investors. Her
                    husband even has bought properties on the courthouse steps, but only two in
                    the last three years, and yet I feel I hit a sore spot. Also party to the
                    discussion was a real estate broker friend who's been in the business for 15
                    years, and she was siding with her. I expect it of a Realtor, but not of a
                    title company owner.

                    Comment


                    • #25
                      Flipping IS Illegal


                      On 11-Jul-2003, "Donald King" <[email protected]> wrote:
                      If it would have stayed in their local good old buddy courts (CO), they night have gotten over, and reaped their own unjust enrichment. The note had not been properly recorded. Problem was, I bought it pursuant to court order, I lived in CA, therfore jurisdiction was in Fed ct. They lost. There is no deceit in unrecrded RE transactions, only the greed of banks, and title companies.
                      I know the banks are greedy, but what of the title companies? Are they the
                      bank's lackeys? What makes them tick?

                      Comment


                      • #26
                        Flipping IS Illegal


                        On 11-Jul-2003, "Donald King" <[email protected]> wrote:
                        Fundamentally, it is no different than if I sell a stock short. I don't own the stock. I just have a contract on stock that I borrowed. I sell it to someone else, without ever taking possession of the shares, and profit. The buyer takes possession, and I take my profit. Equal Protection applies, for if you allow those transactions (which is done a million times a day in the market) the same must apply to all property transactions.
                        "Equal protection." Now that's powerful!

                        Comment


                        • #27
                          Flipping IS Illegal

                          In us.legal.self-represent Baird Spalding <[email protected]> wrote:
                          Why would they care? They care only that their borrower is giving them sufficient collateral (note that this takes into consideration many factors, including the state of title, which seems to be your concern).
                          If their numbers are showing them that a home resold within 6 months is 30% more likely to default than the one held 24 months, I would think they should care. Obviously they don't.
                          Huh? Homes don't default, borrowers do. And why would someone be more
                          likely to default because his seller owned the home a short time?

                          This whole thread is getting very strange.

                          --
                          Words are flowing out like endless rain into a paper cup,
                          They slither while they pass, they slip away across the universe...
                          -Lennon/McCartney

                          Comment


                          • #28
                            Flipping IS Illegal

                            In us.legal.self-represent Baird Spalding <[email protected]> wrote:
                            You're right, I don't know what I'm asking. Tell me what I should be asking. My friend is no idiot. She's a self made millionaire. She just can't seem to think outside the box. I was hoping to get some concrete ammunition to counter her beliefs.
                            The real problem is that you don't know what here beliefs are, so you
                            can't get your ammunition.

                            I would like to use her as a partner but she's dead set against everything I told her.
                            What did you tell her?

                            --
                            Words are flowing out like endless rain into a paper cup,
                            They slither while they pass, they slip away across the universe...
                            -Lennon/McCartney

                            Comment


                            • #29
                              Flipping IS Illegal

                              In us.legal.self-represent Baird Spalding <[email protected]> wrote:
                              On 11-Jul-2003, [email protected] wrote:
                              "More than they paid?" They didn't pay. They encumbered, but they didn't pay. If the market declined, they could back out, No way. They signed a Purchase and Sale agreement obligating them to buy for a price on a date certain. Lots and lots of people got zapped when the market crashed.
                              Nah. All they would lose is their deposit.
                              No, they would get sued for specific performance. You say you want to
                              invest in real estate, but you seem to have a lot to learn.

                              In an up market, they would only lose their deposit. In a down market,
                              the seller would not be able to find a new buyer so easily.

                              --
                              Words are flowing out like endless rain into a paper cup,
                              They slither while they pass, they slip away across the universe...
                              -Lennon/McCartney

                              Comment


                              • #30
                                Flipping IS Illegal

                                On Sat, 12 Jul 2003 02:02:00 +0000 (UTC), [email protected]
                                dijo:
                                Nah. All they would lose is their deposit.
                                No, they would get sued for specific performance. You say you want toinvest in real estate, but you seem to have a lot to learn.
                                Upon a default by the buyer there are three possible remedies for the
                                seller:

                                1) Declare a forfeiture of the deposit
                                2) Sue for damages
                                3) Sue for specific performance

                                However, which one(s) the seller is entitled to is a matter of
                                contract. In many standard form purchase and sale agreements the
                                seller's only remedy is forfeiture of the deposit. In fact, in the six
                                states where I work, it is uncommon to find a contract where the
                                seller has the options of specific performance or damages.

                                Furthermore, in a few states there are statutes limiting the amount of
                                earnest money which can be retained by the seller, typically no more
                                than 5% of the selling price, regardless of how much the buyer
                                actually deposited. The surplus must be returned to the buyer.

                                In one state where I work there is no statutory limit, but there is a
                                state Supreme Court decision which stated that earnest money which was
                                unreasonable in the light of the amount of the seller's actual damages
                                was not enforceable. The case involved the sale of a property for
                                $240,000 with $40,000 earnest money. The buyer defaulted and the
                                seller retained the $40,000. The seller then relisted the property and
                                within a week another buyer was found whose offer was slightly better
                                even than the first buyer's offer. On closing of the second sale the
                                first buyer sued to recover the earnest money, pointing out that the
                                seller suffered no actual damages at all. The court reasoned that the
                                buyer should suffer some consequences, but ordered the seller to
                                return $30,000 of the earnest money. This decision was based on
                                similar previous decisions in several other states.

                                So saying that the seller can sue for specific performance may not be
                                entirely true, depending on circumstances. And even saying that the
                                deposit can be declared forfeit may not always be 100% accurate
                                either. Not only do the laws differ from one state to the next, but
                                commonly used contract provisions vary as well.

                                --
                                Bogus e-mail address, but I read this newsgroup regularly, so reply here.

                                Comment

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