WATCH OUT FOR FORECLOSURE LAWS
You can see from the following, that the equity seller has 4 years to sue for damages. This is not a good time to take his equity,
IE: You find a property valued at $500,000. The seller has $450,000. loans on it and there is $50,000. verifiable equity. You buy the property and you take $50,000. of the equity seller's equity Maybe you give him his moving costs, or $10,000. If you read the laws you will see he has 4 years to sue you for the equity he took ($40,000.) which means he can sue you for $120,000. and this is before his other damages he might add on to his law suit, such as attorneys fees, hardship etc. SEE BELOW FOR THE SPECIFIC LAW AND CODE.
Posted by Candice Harrison! Learn more about foreclosures at our weekly investing in real estate meeting on Wednesday November 11, 2009 at 630pm in Duarte at the Old Spaghetti Factory on Buena Vista St! www.meetup.com/weeklyclubsSGV
See below:
CIVIL CODE
SECTION 1695-1695.17
1695.(a) The Legislature finds and declares that homeowners whose
residences are in foreclosure have been subjected to fraud,
deception, and unfair dealing by home equity purchasers. The recent
rapid escalation of home values, particularly in the urban areas, has
resulted in a significant increase in home equities which are
usually the greatest financial asset held by the homeowners of this
state. During the time period between the commencement of foreclosure
proceedings and the scheduled foreclosure sale date, homeowners in
financial distress, especially the poor, elderly, and financially
unsophisticated, are vulnerable to the importunities of equity
purchasers who induce homeowners to sell their homes for a small
fraction of their fair market values through the use of schemes which
often involve oral and written misrepresentations, deceit,
intimidation, and other unreasonable commercial practices.
(b) The Legislature declares that it is the express policy of the
state to preserve and guard the precious asset of home equity, and
the social as well as the economic value of homeownership.
(c) The Legislature further finds that equity purchasers have a
significant impact upon the economy and well-being of this state and
its local communities, and therefore the provisions of this chapter
are necessary to promote the public welfare.
(d) The intent and purposes of this chapter are the following:
(1) To provide each homeowner with information necessary to make
an informed and intelligent decision regarding the sale of his or her
home to an equity purchaser; to require that the sales agreement be
expressed in writing; to safeguard the public against deceit and
financial hardship; to insure, foster, and encourage fair dealing in
the sale and purchase of homes in foreclosure; to prohibit
representations that tend to mislead; to prohibit or restrict unfair
contract terms; to afford homeowners a reasonable and meaningful
opportunity to rescind sales to equity purchasers; and to preserve
and protect home equities for the homeowners of this state.
(2) This chapter shall be liberally construed to effectuate this
intent and to achieve these purposes.