I Bought The Tax Deed House. Can I Goldmine Here.

Last week I bought a really nice single family built in 2004. It is in FL and is currently occupied. The crazy thing is that it has one current mortgage of $313k that is getting wiped out. The mortgage was originated in 2006 and the tax lien was from 2004. My deed has been recorded and I am starting the quiet title suit to get clear title. I have reviewed the tax deed file and the homeowner was served with notice and the lender was sent certified mail that someone signed for. I paid $157k.

Now the questions. I read the FL statues and it said I can evict with the courts help after I give the "tenant" 5 days notice. My question should I try before I conclude the quiet title?

Secondly, assuming the sale can't get overturned by the lender's title co, do you think that they will try to pay me off to protect the $313k loan that they wrote title insurance on and missed the $900 in back taxes that sent it to the tax deed sale? I am hoping they will buy me out as I think they will be better off getting the house back from me for say my purchase price plus $75k than having to absorb the huge loss if they don't. I am sure they will get first crack at the surplus from the sale of about $156k.

Has anyone seen this happen with a big istitutional loan getting wiped out for negligence on the title company?

Should I hold out for top dollar? I figure if they pay me off for $75k then they still save about $80k over not working with me and having to pay off the whole loan loss.

[ Edited by dirtman89 on Date 02/26/2008 ]

Anybody buy a tax deed prop where a title insurance company got involved?

Dirtman.... Congratulations on your purchase.

The title policy may have been written subject to certain exceptions, such as previous mortgages, taxes, etc needed to be satisfied in for the title policy to take effect.

A sloppy closing agent may have missed a condition or two. So, the Mortgage Company may be going after you, not the Title Company.

I have had a few sales overturned because of apparent mistakes. Judges don't like investors to be "unjustly enriched" and will try to get you to negotiate a settlement for a $5K or so profit to you.

I held out for $15K on one rather than risk an outright overturn of the sale.... when the Judge glared at me saying: "I would suggest you two work something out or I am going to make the decision I know you won't be happy with." I got my $15K, the sale was overturned and I got my purchase money back. [addsig]

I wonder if the judge would consider that they didn't respond grounds for overturning the sale. I guess that can happen. Bargain76, what happened with your deal on Cassleberry Rd. up by the Jax airport in Oceanway. I wanted to buy those lots from you. It looks like that sale got overturned?

Yep, the sale was overturned.

The defendent's position was improper service, which usually prevails, and the defendent alleged that her daughter, who received service, was retarded and unable to properly respond. She followed up with a copy of a SS check the daughter was receiving. for beind disabled.

I had no choice than to be gracious and walk away, getting my money back. Such is the foreclosure auction business. [addsig]

Dirtman – keep your hopes up. You might just wind up with the property. You never know. I purchased a property, waited the redemption time frame, sent certified notices to owner and BANK telling them that they were going to loose the property and neither one responded to the notices. Now that all is said and done the Bank wants to buy property back from me. They are offering me 10 times what I gave for the property and almost FMV . So it does happen. The Bank just went to sleep.

I agree. Keep your hopes up. Play the game.

Notify all possible encumbrances in your quiet title suit and GO FOR IT!

Just don't be blindsided if they judge against you and you have to settle for a miniscule profit.

Go for the gold, man. Just understand you may have to settle for much less. But, as the owner of the property, the title holder, you ARE in control. [addsig]