Weekly Twitter Digest (Link Roundup) for 2011-07-23

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

14 comments:

  1. 1
    ray pepper says:

    “equity skimming” virtually impossible to charge people since the majority ATTEMPT Loan Modification as an “effort” and “assistance” from their Lender prior to defaulting and the MAJORITY have purchased greater then 2 years ago during the Bubble. Seems like this is another false threat placed on homeowners to SCARE them into making the WRONG financial decision for their family. Along with ” you will never be able to buy a home again” ..Good Luck with that one.

    Zillow’s open at 50.00 was sheer manipulation and as usual left so many bag holders. With housing recovery years out watch this trade down down down in the months/year to come. Profitability will not arrive with income derived from Realtor Lead generation fees. Good Luck guys. LEDR and ZIPR will display the same stock chart as Z in the year to come..

  2. 2

    Jillayne’s Twitter comments are a bit of an overstatement or oversimplification. It’s almost as if she had somehow been limited in how much she could say. ;-)

  3. 3

    By ray pepper @ 1:

    “equity skimming” virtually impossible to charge people since the majority ATTEMPT Loan Modification as an “effort” and “assistance” from their Lender prior to defaulting and the MAJORITY have purchased greater then 2 years ago during the Bubble. Seems like this is another false threat placed on homeowners to SCARE them into making the WRONG financial decision for their family. Along with ” you will never be able to buy a home again” ..Good Luck with that one.

    I don’t agree with your analysis, but your result is largely correct. The statute at issue was created as part of the poorly thought out Distressed Property Law. Equity skimming under that law is basically some scheme to take control of a property from an existing owner, presumably one with equity. It now addresses a problem that isn’t that common.

    If you just had a homeowner renting a house out and not paying the mortgage, that would not be equity skimming, and I’m not even sure that would be actionable. It didn’t used to be, but I’d need to update my research on that, and have no intention of doing so.

  4. 4
    David Losh says:

    RE: ray pepper @ 1

    There is a procedure for rental income if you don’t pay your mortgage. It should go into an account to be held for the lender.

    Well, anyway, good luck with that one.

  5. 5

    By David Losh @ 4:

    There is a procedure for rental income if you don’t pay your mortgage. It should go into an account to be held for the lender.

    Again, I don’t believe that is correct. One of the applicable statutes is RCW 7.28.230, which seems to require some sort of creditor action, and that’s consistent with what the law was years ago. Again though, whether that’s still the law is something I haven’t researched.

    I also recall that there is an exception to the anti-deficiency rule on commercial loans where rents are wrongfully diverted.

    Anyone collecting rent and not paying their deed of trust would be well advised to consult with a real estate attorney.

  6. 6
    David Losh says:

    I like Zillow.

    Rascoff said it three times, “the consumers, and advertisers delight in the website.” That’s a lot different than Real Estate agent driven, or lead generation. Any one remotely interested in Real Estate products looks at Zillow. It’s everywhere you want to be and so under utilized it’s ridiculous.

    I really, really think people are confused by the internet. Even internet entrepenuers I talk with seem completely at a loss.

    The internet is what people look at, it’s where they search, and do research. You never know where some one will find you, or what they were looking for. It’s how many times you’re mentioned, in a positive way, and so far I think Zillow has done extremely well in having a positive internet image.

  7. 7
    David Losh says:

    RE: Kary L. Krismer @ 5

    Yes, before keeping rent money, you should consult an attorney, and an accountant. I can think of a thousand missteps in keeping rent money.

    A childhood friend was convicted of keeping rent money he collected on properties he controlled that were in default. The was probably 30 years ago. I followed the laws that came out of that for a long while, but it has been years since doing that.

  8. 8
    One Eyed Man says:

    RE: David Losh @ 4

    You’re thinking of the process common in commercial foreclosures where a “receiver” is appointed by the court to collect the rents. That remedy generally requires that there be an “assignment of rents” clause contained either in the deed of trust or signed as a separate recorded document. An assignment of rents is almost always done in a commercial deal, but never (or almost never) in residential deals. I’ve never tried to determine why. Perhaps there’s a regulation, statute or HUD policy that deters if not prohibits it.

  9. 9
    David Losh says:

    RE: One Eyed Man @ 8

    However, if you are collecting rent, it is a commercial venture. The renter also has rights.

  10. 10

    RE: David Losh @ 9 – I’m not sure that they use a different deed of trust form when an investor buys a single family with deed of trust financing, but in any case, many rentals were financed at a point where the owner was an occupant or intended occupant.

    Not sure what rights you think the tenant has that would affect this.

  11. 11
    One Eyed Man says:

    RE: Kary L. Krismer @ 5

    Kary, you’re probably thinking of the following language in RCW 61.24.100 (3)(a) generally concerning pursuit of a deficiency against a guarantor or borrower on a commercial deed of trust after a trustee’s sale:

    “(3) This chapter does not preclude any one or more of the following after a trustee’s sale under a deed of trust securing a commercial loan executed after June 11, 1998:

    (a)(i) To the extent the fair value of the property sold at the trustee’s sale to the beneficiary or an affiliate of the beneficiary is less than the unpaid obligation secured by the deed of trust immediately prior to the trustee’s sale, an action for a deficiency judgment against the borrower or grantor, if such person or persons was timely given the notices under RCW 61.24.040, for (A) any decrease in the fair value of the property caused by waste to the property committed by the borrower or grantor, respectively, after the deed of trust is granted, and (B) the wrongful retention of any rents, insurance proceeds, or condemnation awards by the borrower or grantor, respectively, that are otherwise owed to the beneficiary.”

  12. 12

    RE: One Eyed Man @ 11 – Yes, that’s exactly the statute I was referring to.

  13. 13
    David Losh says:

    The rents are income that will need to be declared. That’s why I mentioned the accountant.

    The renter has rights under the foreclosure laws.

    I just had this come up where the renter didn’t pay rent because the owner was in pre foreclosure, or foreclosure. The owner evicted the renter, so he could continue to collect rents.

    The renter vacated, but took some time doing that.

    It’s a mess that I think few people are prepared for.

    Just because you control the property while in a foreclosure I don’t think the monies are necessarily your. In my childhood friend’s case, what he was doing, at the time, was considered legal by a technicality, because the situation hadn’t really been tested.

  14. 14
    softwarengineer says:

    Life is Sure Convoluted With Confusing Laws With Distressed Properties Now-a-days

    I’m glad you bloggers have some ideas what to make of it.

    My neighbor still can’t sell the immacualnt $119K 1500 SF Rambler and lot, in my neighborhood. The first time homebuyer choices today must be dismal when it comes to qualifying….imagine them trying for a $200-300K unit [impossible]. I suggested listing it for $110K cash and/or buying the next property by simply trading the old property [assumes you have the clear title in your name].

    I’ve also noticed my neighborhood is becoming one ethnic group again [white caucasion], after many evictions and quick sells at the last minute [most of these are Hud Homes now] the last couple years. I hear Mexico has more job opportunities than America right now, lower pay, but much lower cost of living too.

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