Investor - Rental BEWARE of HOA auctioned properties!! (Las Vegas: sales, foreclosures)

OmegaSupreme · 10-29-2014, 02:30 AM

Quote:

Originally Posted by lvoc

Edit - I find nothing at this point in the MLS. Could have been shot or withdrawn...

probably because there are too many results... op could have been a little more specific.

like zip 89081 and yr built 2007

OmegaSupreme · 10-29-2014, 02:49 AM

Quote:

Originally Posted by BBMW

It would show up on a title search (and anyone who would buy the house without a title search and insurance is an idiot.)

not true

your average joe does not know about title insurance

he tries to find the best deal, and will certainly be attracted to a deal with a story of how it's a deal

if he contacts the actual listing broker of one of the houses in the OP... then it's game over...

because average joe will certainly sign any and all of the forms presented to him by a man in a suit with a business card to boot

skugelstadt · 10-29-2014, 07:38 AM

Don't real estate agents (yours) have at least minimal fiduciary responsibility to act on your behalf? I would think the real estate company would want to avoid bad publicity and lawsuits. I would think it's not worth the risk to reputation and loss of future clients. (I'm talking about glossing over the no title insurance)

Michael-MS · 10-29-2014, 11:54 AM

Quote:

Originally Posted by lvoc

I am interested particularly why I did not find them. Drop me a DM with the MLS #s

1491230, 1492375 and 1491226 were all purchased from HOA auctions for under 10k and are now active ER listings for cash only with no title insurance available.

Michael-MS · 10-29-2014, 12:02 PM

Quote:

Originally Posted by LVAllen

The NV Supreme Ct. HAS resolved that issue. Quite recently, in fact. Their view was that the banks could protect their interest by satisfying the HOA lien, or by requiring the borrower to deposit the dues in escrow.

I'm not sure if I understand you correctly. The HOA lien at this point is gone because the property was sold at the HOA auction to satisfy the lien. The bank couldn't have paid the HOA lien sooner because the bank has not completed the foreclosure yet. And now that the HOA auctioned off the lien, they can't complete the foreclosure. It's a catch-22 and some "investor" who paid $6,000 to buy the HOA lien is now trying to sell the property for full price. The bank's are getting screwed because the foreclosure process is longer than the HOA lien process.

It's also legally flawed because a 1st mortgage is a FIRST mortgage. If that 1st mortgage can be nullified then the risk to investment ratio for mortgage companies sky rockets from a foreclosure (at least they got some money back) to basically a lose-all investment.

yellowsnow · 10-29-2014, 12:20 PM

Quote:

Originally Posted by OmegaSupreme

not true

your average joe does not know about title insurance

he tries to find the best deal, and will certainly be attracted to a deal with a story of how it's a deal

if he contacts the actual listing broker of one of the houses in the OP... then it's game over...

because average joe will certainly sign any and all of the forms presented to him by a man in a suit with a business card to boot

I'm an average Joe and I know about title insurance. But I'm sure there are a few out there who would go for this.

lvoc · 10-29-2014, 12:36 PM

This is strictly a specialty item. It first off only works with cash which removes virtually all naive buyers.

Cash investors will mostly turn up their noses unless they have experience in the area.

Agents would have no problem and pretty much no risk in handling such a deal. I would provide a specific disclosure vetted by the house lawyer. I suppose you could find some sloppy operator who did not full disclose but it would be pretty hard to find.

The only one I can see getting into trouble on these would be a small cash operator who thinks he understands it and is going to make a killing. But he may well go unrepresented to save the commission.

Just not a big deal.

lvoc · 10-29-2014, 12:41 PM

Quote:

Originally Posted by Michael-MS

I'm not sure if I understand you correctly. The HOA lien at this point is gone because the property was sold at the HOA auction to satisfy the lien. The bank couldn't have paid the HOA lien sooner because the bank has not completed the foreclosure yet. And now that the HOA auctioned off the lien, they can't complete the foreclosure. It's a catch-22 and some "investor" who paid $6,000 to buy the HOA lien is now trying to sell the property for full price. The bank's are getting screwed because the foreclosure process is longer than the HOA lien process.

It's also legally flawed because a 1st mortgage is a FIRST mortgage. If that 1st mortgage can be nullified then the risk to investment ratio for mortgage companies sky rockets from a foreclosure (at least they got some money back) to basically a lose-all investment.

Welcome to the recent Nevada Supreme Court Decision. That is exactly what the court decided. The HOA lien...done properly with proper notice...overrides the First. Period. -

The argument was the bank received proper notice and had the option of simply paying the lien. Failing to do so they gave up their priority.

It is not an ongoing problem as the banks now simply pay the lien. The ongoing issue still to be decided is whether the HOA can include collection costs in the lien. The court has hinted the answer is no...but has not finally ruled.

News Article

http://www.reviewjournal.com/busines...rst-deed-trust

Michael-MS · 10-29-2014, 01:08 PM

Great article, thanks! I took that info and found a more recent article:
Nevada HOA Liens Extinguish First Deed of Trust

Sounds like the banks won the case at a higher level and then the "investor" won at a lower level. The issue at hand is that the banks would not and should not have let the HOA dues go to auction. The banks are arguing that they were not given proper notice of their 1st mortgage being wiped out. In any case, it sounds like the "investor" has no right to sell these properties yet, because the cases are still ongoing.

lvoc · 10-29-2014, 01:13 PM

Quote:

Originally Posted by Michael-MS

Great article, thanks! I took that info and found a more recent article:
Nevada HOA Liens Extinguish First Deed of Trust

Sounds like the banks won the case at a higher level and then the "investor" won at a lower level. The issue at hand is that the banks would not and should not have let the HOA dues go to auction. The banks are arguing that they were not given proper notice of their 1st mortgage being wiped out. In any case, it sounds like the "investor" has no right to sell these properties yet, because the cases are still ongoing.

Nope. The crucial issue is settled. The Mortgage Holders may have a defense in some cases over notice. But if the notice was given they will lose in a quiet title action. Giving the notice was clearly spelled out and is likely to have been done consistently. There may be issues of who got the notice but that is likely an issue inside the mortgage system rather than a problem for the HOA.

Again the issue is really not an ongoing one. It deals with homes HOA foreclosed in the last years not the ones at issue now.