Discussion Forum

Marty Couch
Investor

Re:Actual Name of a titile comp or Someone in California that closes transactions

Saturday, February 09 2008 07:08 PM

Hi Juan,

From your title it says you are a "short sale specialist" and this may be causing some of the difficulty you are having in California.

California's new Civil Code Section 1695-1695.17 seems like it is going to tie things up. Of note are the following sections:

1695.13.  It is unlawful for any person to initiate, enter into,
negotiate, or consummate any transaction involving residential real
property in foreclosure, as defined in Section 1695.1, if such
person, by the terms of such transaction, takes unconscionable
advantage of the property owner in foreclosure.

1695.14.  (a) In any transaction involving residential real property
in foreclosure, as defined in Section 1695.1, which is in violation
of Section 1695.13 is voidable and the transaction may be rescinded
by the property owner within two years of the date of the recordation
of the conveyance of the residential real property in foreclosure.

So, here is the problem. The state does not define what "unconscionable
advantage" is but if that is what happens, the seller has 2 years to undo the transaction. Therefore, a title company has no way to insure this type of transaction.

For example, if you negotiate a short sale down to $400,000.00 and have an end buyer willing to pay $465,000.00 and you "double close" and take the $65,000.00 difference, did you take "unconscionable
advantage" of the seller?

The code also states it will be "liberally construed". This is not going to be in favor of the investor.

At this point it will be very difficult to get a Title Company in CA on board for anything creative. Sorry I don't have better news.

Marty Couch
http://www.PPLChicago.com

REPLY

Marty Couch
Investor

Re:Re:Re:Actual Name of a titile comp or Someone in California that closes transactions

Sunday, February 10 2008 02:36 PM

Hi Daniel,

You probably know more about the code than I do. Just from reading it however, it is poorly written and the fact that it is not clear cut is what I feel will make life difficult with title companies in California.

My post above was not meant to give any opinion as far as weather the transactions themselves are legal or not. Rather I was just trying to point out why they may raise "red flags", weather appropriate or not to title companies.

Title companies traditionally play a very conservative role in the closing process. Because of the current real estate and mortgage situation this is getting to be even more the case.

As you seem to be versed in what is going on out there more so than I am, if you are finding title companies that are still willing to do these types of transactions, please let us know who and how they are best accomplished.

Thank you for the clearing up of the intent of the code. I look forward to reading about your experiences in these transactions and how best to make them happen.

Marty Couch
http://www.PPLChicago.com

REPLY

orona43
Short Sales Specialist (Investor)

Re:Re:Actual Name of a titile comp or Someone in California that closes transactions

Sunday, March 09 2008 12:28 PM

Thank you for your reply we will continue to work on this projcect Our local California Title company does not seem to work with these land trust from my understanding they are getting them mixed up with the standard living trust, My associate and I will keep you updated with our progress.  We will be using these land trust for short sale transactions and have currently been recieving acceptance letters from the lenders our last hurdle will be title company and approved buyers

Juan Orona

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