There’s far more predatory and vulturous behavior in the foreclosure world…and it’s not just banks.
Read (from a prospectus filed with the Securities and Exchange Commission) about how a high flying finance organization is aggregating homeowner’s association foreclosures….
From The Prospectus:
As of June 30, 2015, we have, since our inception, purchased an aggregate of approximately $274 million in Association receivables by funding a total of approximately $11 million with respect to 11,000 units across nearly 500 Associations in Florida, Washington and Colorado. Through June 30, 2015, we have, since our inception, received just over $102 million from approximately $192 million in purchased Accounts. From these purchased Accounts, we have recovered almost all of our principal investment of $8 million and earned about $29 million in revenues. Per our contracts, we have paid or recovered $10 million in legal fees and returned $55 million to our funded Associations.
Our original product relies upon Florida statutory provisions that effectively protect the principal amount invested by us in each Account. In particular, Section 718.116(1), Florida Statutes, makes purchasers and sellers of a unit in an Association jointly and severally liable for all past due assessments, interest, late fees, legal fees, and costs payable to the Association. In addition, the statute grants to Associations a so-called “super lien”, which is a category of lien that is given a statutorily higher priority than all other types of liens other than property tax liens. Under the Florida statute, a Florida Association’s super lien has higher priority than all other lien holders, except in the case of property tax liens. The amount of the Association’s priority over a first mortgage holder that takes title to a property through foreclosure (or deed in lieu), referred to as the Super Lien Amount, is limited to twelve months’ past due assessments or, if less, one percent (1.0%) of the original mortgage amount. Under our contracts with Associations for our original product, we pay Associations an amount up to the Super Lien Amount for the right to receive the funded Super Lien Amount and all collected interest and late fees on Accounts purchased from the Associations.
Source: Matt Weidner law blog