Proficient Note Buyers
  • Blog
March 16, 2011
Taking Hostages (Legally)
As I've mentioned in prior posts, buying bank-owned properties (REO) is one of the things we do. Because we buy in bulk and via Quit Claim Deeds most times, we inherit the properties "warts and all". In other words, any nuisance liens, delinquent taxes, water bills, etc. - we get all of them in addition to the deed to the property.

What we've learned is that banks and their asset managers are extraordinarily deficient in actually managing the lion's share of their properties. The same banks who foreclosed out their deadbeat borrowers for non-payment are simply a different breed of deadbeat when it comes to managing their own properties. This phenomenon is most obvious on the topic of condominium units.

In the past several months, we have encountered several nasty surprises in the form of outrageously high amounts of delinquent condo association dues. With condos, maintenance fees accrue every month whether or not there is an occupant in the property. A property that winds its way through the foreclosure process, sits months on the market, then eventually gets sold in bulk can have delinquent dues of a year (or more) owing by the time we take title to it.

But that's just the tip of the ol' iceberg. Add to it late fees, interest on the past due amounts and legal fees, and the tab to get back into good standing with the association is usually double the amount of the actual delinquent dues. The legal fees are where I take issue:

At a certain point of delinquency, the associations turn their collectibles over to an attorney. These attorneys are ruthless - they insist only the association can negotiate a lower payoff (for those of us inheriting these ungodly liabilities), yet we cannot contact the associations, because only the attorneys are their designated agents. I think you can see the frustration - it's like a dog chasing its tail trying to get anywhere with these bloodsuckers.

To top it all off, the attorneys won't tell us (the new owner of the property) how much is owed in delinquent dues until (wait for it!) we PAY them an estoppel fee, usually $150 or more. Then we get an official-looking letter breaking down all the fees. Let me say this again - we cannot even get a verbal estimate of what's owed - we must prepay for an estoppel to simply know how much to pay!

Let's look at this from a common sense perspective. If you were a debt collector, and the borrower's dad, brother, friend (whomever) came to their rescue and offered to make you whole on the debt, would you not GLADLY (and FREELY) provide how much was owed, just to get paid? Or to use a more ridiculous example, imagine checking out at the grocery store: The clerk finishes scanning your items, then stands there with her arms folded. You ask how much it all adds up to, and she says it will cost you an additional $5 for her to hit the 'subtotal' button on the cash register. Is that simply insane or what?

If I had a lot of time (and a lot more money), I think I might challenge the legality of this scam. As it stands, all I can do is expose it, ridicule it, and (hopefully) shame these hacks into a much more sensible (and fair) solution.

Make it a great week.

Clint


Bookmark and Share

Our efforts stay focused on note holders. If you are a note finder, a note broker, or anyone other than the actual note holder, please do not contact us.


Proficient Note Buyers
Copyright © 2007 Proficient Note Buyers, LLC - All Rights Reserved [Site Map]
Website by bizmarquee.com