gutted
November 6, 2015 8:12 PM Subscribe
Yeah, notsnot, I came here to comment on that too. I'm not sure I understand how the Robertson's could be considered the owners of the property, but if that *is* the case, it is hard to believe the people writing and signing off on these laws are unaware of the consequences on those who aren't the target of them. Yet, with no allowance written into the law to account for these cases, its difficult not to infer the laws are actually being written and signed for the benefit of those with the equity to afford to make the purchases.
The article ends by suggesting the best sign of hope is that the Treasurer of the County and his deputy are resigning. If this is the best of the hope available, god help the poor.
posted by bigZLiLk at 9:54 PM on November 6, 2015
The article ends by suggesting the best sign of hope is that the Treasurer of the County and his deputy are resigning. If this is the best of the hope available, god help the poor.
posted by bigZLiLk at 9:54 PM on November 6, 2015
I'm still confused at exactly what the 15 year land contract that Robertson signed was. Was it a long term lease or a mortgage? It sounded like she was not the one responsible for paying the property's taxes so I don't see how Snyder's law would've applied to her.
posted by gyc at 11:31 PM on November 6, 2015
posted by gyc at 11:31 PM on November 6, 2015
An Installment Land Contract is an alternative to a mortgage. They are obsolete, and famously risky for the buyer. There's hardly ever a good reason to use one anymore, and seeing it in the article was a huge red flag re: QuitRent.net and Paramount Land Holdings.
posted by snuffleupagus at 11:48 PM on November 6, 2015 [4 favorites]
posted by snuffleupagus at 11:48 PM on November 6, 2015 [4 favorites]
Are The Kastaneses or Barnes still in this business? If so, aren't they going to keep doing this again and again, and again?
posted by Public Corruption? at 4:04 AM on November 7, 2015
posted by Public Corruption? at 4:04 AM on November 7, 2015
Back in 2009, Robertson, a charismatic 31-year-old with a full-bosom and high cheekbones, was driving through the neighborhood when she noticed a sign in front of a boarded up house
Really? Really? We need to know how big her breasts are?
In a land contract, the seller is lending the buyer the money for the house, and the buyer makes payments directly to the seller for the term of the land contract (or until refinancing the property). One of the risks for the seller is that, instead of getting the money for the property up-front, they get monthly payments. For the buyer, it's more risky than a mortgage because ownership remains with the buyer until the completion of the contract. It's risky for both parties because there's no financial institution between them taking on any of the risk, or carrying the power to, say, modify the agreement if the buyer falls behind on payments as a bank or credit union might.
We sold a house on a land contract some years ago (we live in Michigan, FWIW). The house had a settling problem that made it difficult to sell, and we took the land contract offer because it wasn't like offers were rolling in. The buyer offered a land contract because he was buying it to use as a rental; he had many rental properties and getting a land contract was more straightforward than trying to get another mortgage.
My partner owned the home free and clear, or it would have been insanely stressful instead of just very very stressful. After a few years, the buyer refinanced and paid off the land contract, which was a lucky break for us because he'd done no upkeep on the property and it was condemned and torn down not long after that.
posted by not that girl at 4:29 AM on November 7, 2015 [6 favorites]
Really? Really? We need to know how big her breasts are?
In a land contract, the seller is lending the buyer the money for the house, and the buyer makes payments directly to the seller for the term of the land contract (or until refinancing the property). One of the risks for the seller is that, instead of getting the money for the property up-front, they get monthly payments. For the buyer, it's more risky than a mortgage because ownership remains with the buyer until the completion of the contract. It's risky for both parties because there's no financial institution between them taking on any of the risk, or carrying the power to, say, modify the agreement if the buyer falls behind on payments as a bank or credit union might.
We sold a house on a land contract some years ago (we live in Michigan, FWIW). The house had a settling problem that made it difficult to sell, and we took the land contract offer because it wasn't like offers were rolling in. The buyer offered a land contract because he was buying it to use as a rental; he had many rental properties and getting a land contract was more straightforward than trying to get another mortgage.
My partner owned the home free and clear, or it would have been insanely stressful instead of just very very stressful. After a few years, the buyer refinanced and paid off the land contract, which was a lucky break for us because he'd done no upkeep on the property and it was condemned and torn down not long after that.
posted by not that girl at 4:29 AM on November 7, 2015 [6 favorites]
Sometimes I see in property ads a phrase like "owner will finance" -- is that the same as an offer of a land contract?
posted by Dip Flash at 5:19 AM on November 7, 2015
posted by Dip Flash at 5:19 AM on November 7, 2015
ILCs have pitfalls for both sides, but the forfeiture clauses contained in a typical ILCs make them significantly more risky for the buyer than the seller. And make them a good instrument for scam artists looking to trap unqualified buyers who they can bleed before discarding:
One of the risks for the seller is that, instead of getting the money for the property up-front, they get monthly payments.
Which means that (again, in a typically abusive ILC) if the buyer defaults (which could be as easy as missing a single payment) the seller keeps all of the payments made to date, and the property. There is no legal process as there is in a mortgage, judicial or non-judicial. Without protective state laws regulating ILCs, the buyer probably has no legal remedy or even an equitable right to a refund.
Sometimes I see in property ads a phrase like "owner will finance" -- is that the same as an offer of a land contract?
Could be, but a normal mortgage is also possible (and a much better idea).
posted by snuffleupagus at 5:23 AM on November 7, 2015 [3 favorites]
One of the risks for the seller is that, instead of getting the money for the property up-front, they get monthly payments.
Which means that (again, in a typically abusive ILC) if the buyer defaults (which could be as easy as missing a single payment) the seller keeps all of the payments made to date, and the property. There is no legal process as there is in a mortgage, judicial or non-judicial. Without protective state laws regulating ILCs, the buyer probably has no legal remedy or even an equitable right to a refund.
Sometimes I see in property ads a phrase like "owner will finance" -- is that the same as an offer of a land contract?
Could be, but a normal mortgage is also possible (and a much better idea).
posted by snuffleupagus at 5:23 AM on November 7, 2015 [3 favorites]
On the other hand, the ILC at the end of the article makes good sense. The nonprofit is demonstrably trustworthy, the anonymous donor wouldn't want to seize the property if they could, a more complicated transaction is costly overkill for a $4K debt outstanding on a $8K transaction, and the contract will be concluded in a short time.
Also, I probably should've said 'little' legal process with regard to an ILC forfeiture compared to a mortgage, rather than 'no' process. The seller might have to take action to eject the buyers if they're in possession, and the buyers might be able to sue the seller. But in a mortgage, the seller has to take action to initiate foreclosure. That's not so in an ILC, because the seller still has the title. The buyer has to challenge the forfeiture.
posted by snuffleupagus at 5:45 AM on November 7, 2015
Also, I probably should've said 'little' legal process with regard to an ILC forfeiture compared to a mortgage, rather than 'no' process. The seller might have to take action to eject the buyers if they're in possession, and the buyers might be able to sue the seller. But in a mortgage, the seller has to take action to initiate foreclosure. That's not so in an ILC, because the seller still has the title. The buyer has to challenge the forfeiture.
posted by snuffleupagus at 5:45 AM on November 7, 2015
OK, here's the notice Michigan requires on an ILC forfeiture, before eviction can be initiated.
According to Avvo's digest, Michigan allows both this method and a suit for breach of contract, in which case the seller may also be able to recover past due payments, or accelerate the debt (i.e. sue for performance -- collect the balance on the contract and conclude the sale). Those remedies aren't available in a forfeiture and eviction.
The Robinsons certainly have remedies against Paramount (Legal Svc's of NW MI), given the title problems (although they got a quitclaim deed, not a warranty deed) and the failure to pay the taxes, but it didn't matter because Paramount was a scam all along, so suing wasn't going to help them save their house.
Here's the Michigan Foreclosure Task Force's handout on ILCs. Note the laissez faire approach taken to the terms of an ILC in Michigan (at least, before looking at any case law): the 'well crafted' guidelines are not mandatory, the contract merely has to satisfy the statute of frauds and meet 'general contract principles.'
posted by snuffleupagus at 6:11 AM on November 7, 2015
According to Avvo's digest, Michigan allows both this method and a suit for breach of contract, in which case the seller may also be able to recover past due payments, or accelerate the debt (i.e. sue for performance -- collect the balance on the contract and conclude the sale). Those remedies aren't available in a forfeiture and eviction.
The Robinsons certainly have remedies against Paramount (Legal Svc's of NW MI), given the title problems (although they got a quitclaim deed, not a warranty deed) and the failure to pay the taxes, but it didn't matter because Paramount was a scam all along, so suing wasn't going to help them save their house.
Here's the Michigan Foreclosure Task Force's handout on ILCs. Note the laissez faire approach taken to the terms of an ILC in Michigan (at least, before looking at any case law): the 'well crafted' guidelines are not mandatory, the contract merely has to satisfy the statute of frauds and meet 'general contract principles.'
posted by snuffleupagus at 6:11 AM on November 7, 2015
This is why some states just don't do tax auctions on homesteaded (owner-occupied) housing. They just put a lien on the property that must be satisfied before it can transfer, and has priority over all other liens, including a mortgage lien.
If the tax authority comes to find that the owner no longer lives there, that is when it goes up on the auction block.
Wouldn't help someone in an installment contract, though, since the occupant is not yet the owner, but it does provide protection for those with traditional mortgages at least. (Although it could be argued the land contract is more traditional..the abstract for a property I lived in in high school had 3 or 4 land contracts out of 5 or 6 transfers, the last being the one my great-uncle used to buy the property before building his house on it)
posted by wierdo at 3:00 PM on November 7, 2015
If the tax authority comes to find that the owner no longer lives there, that is when it goes up on the auction block.
Wouldn't help someone in an installment contract, though, since the occupant is not yet the owner, but it does provide protection for those with traditional mortgages at least. (Although it could be argued the land contract is more traditional..the abstract for a property I lived in in high school had 3 or 4 land contracts out of 5 or 6 transfers, the last being the one my great-uncle used to buy the property before building his house on it)
posted by wierdo at 3:00 PM on November 7, 2015
New York Times: Real Estate Shell Companies Scheme to Defraud Owners Out of Their Homes Stephanie Saul - "Relying on the secrecy of limited liability companies, white-collar thieves are targeting pockets of New York City for fraudulent deed transfers, leaving the victims groping for redress."
posted by the man of twists and turns at 7:06 PM on November 7, 2015 [1 favorite]
posted by the man of twists and turns at 7:06 PM on November 7, 2015 [1 favorite]
" in January Gov. Rick Snyder signed into law a bill that prohibits individuals with a foreclosed property or delinquent taxes from bidding in the auction."
A lot of that went on here in Florida, refinancing into huge bubble price mortgages, taking the cash out and not paying taxes or mortgage, letting it foreclose, then buying back at tax cert auction.
posted by tilde at 6:17 AM on November 8, 2015 [1 favorite]
A lot of that went on here in Florida, refinancing into huge bubble price mortgages, taking the cash out and not paying taxes or mortgage, letting it foreclose, then buying back at tax cert auction.
posted by tilde at 6:17 AM on November 8, 2015 [1 favorite]
This is why some states just don't do tax auctions on homesteaded (owner-occupied) housing. ...Wouldn't help someone in an installment contract, though, since the occupant is not yet the owner, but it does provide protection for those with traditional mortgages at least.
It might help, depending on the state law. Even Michigan recognizes an ILC buyer's equitable interest in the property, going so far as to make it separately alienable, insurable, recordable, etc. (See the Task Force link above). However, that the equitable interest doesn't avoid forfeiture under a properly enforceable ILC (because it's part of the bargain).
posted by snuffleupagus at 6:10 AM on November 9, 2015
It might help, depending on the state law. Even Michigan recognizes an ILC buyer's equitable interest in the property, going so far as to make it separately alienable, insurable, recordable, etc. (See the Task Force link above). However, that the equitable interest doesn't avoid forfeiture under a properly enforceable ILC (because it's part of the bargain).
posted by snuffleupagus at 6:10 AM on November 9, 2015
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Jesus, what an absolute piece of garbage.
posted by notsnot at 8:39 PM on November 6, 2015 [22 favorites]