$1.2 million Tampa mansion for $10k

[Slimprofits]

http://www.theledger.com/article/201...NEWS/110629508

By KRIS HUNDLEY & SUSAN TAYLOR MARTIN
ST. PETERSBURG TIMES
Published: Sunday, June 26, 2011 at 11:58 p.m.

In just eight months, Barry Haught and his business associates have acquired 71 properties in Hillsborough County with a market value of $8.2 million.

Total purchase price according to public records: Just over $220,000.

Haught's group is among a new breed of investors who have found an unusual niche: buying properties foreclosed on by homeowners associations because the residents didn't pay their dues. Given so many struggling homeowners and the abundance of HOAs in Florida, the potential for profit is great.

The opportunity has attracted some unlikely buyers, among them Haught, who spent 4½ years in prison for Medicare fraud and whose own home is in foreclosure.

Haught and his associates have landed some amazing deals:

A $1.2 million bayfront home in Apollo Beach for $10,010.

A 3,700-square-foot home in north Tampa for $8,090.

Dozens of single-family homes in Brandon and Riverview for less than $4,000 each.

Investors like Haught can rent out the homes, pocketing the income for months or potentially years until the bank finally forecloses — and they don't have to tell tenants that the lender could kick them out at any time.

[LazyBoy]

Re: $1.2 million Tampa mansion for $10k

Investors like Haught can rent out the homes, pocketing the income for months or potentially years until the bank finally forecloses — and they don't have to tell tenants that the lender could kick them out at any time.

I didn't follow this part.

Does the buyer of a HOA foreclosure assume the mortgage? So these guys are buying with no intent to pay the mortgage?

[Slimprofits]

Re: $1.2 million Tampa mansion for $10k

So these guys are buying with no intent to pay the mortgage?

yes.

http://www.bankrate.com/financing/mo...#ixzz1Ro6KxR9o

Since most homeowners owe less than $15,000 in association dues, the HOAs can file their foreclosure cases in county court rather than in circuit court, where caseloads are backed up. This allows the associations to get final judgment on a foreclosure in as few as 270 days verses the 617 days it now takes for the average bank foreclosure.

Yes, a mortgage lender would gladly pay the back dues to protect their investment -- if they knew about it. But because the HOA doesn't have to notify the bank of its foreclosure actions, it could be months or even years before the primary lender forecloses.

Enter HOA chasers like Barry Haught and his associates. They acquire HOA foreclosures in private for pocket change, since they only have to pay off the delinquent HOA dues, not satisfy the mortgage. They then rent the property, and sometimes live there, for the months and even years it takes for the bank to foreclose.

[swgprop]

Re: $1.2 million Tampa mansion for $10k

Yes, a mortgage lender would gladly pay the back dues to protect their investment -- if they knew about it. But because the HOA doesn't have to notify the bank of its foreclosure actions, it could be months or even years before the primary lender forecloses.[/INDENT]

Actually no. The HOA's position in title is inferior to the lenders thus the lender has no incentive to pay the dues - they don't have to protect their investment. This is a rather interesting scam, bottom feeding at its finest but within legal boundaries.

[c1ue]

Re: $1.2 million Tampa mansion for $10k

And this is assuming there isn't some closed loop incestuous relationship going on.

I can see the scam now: HOA forecloses on some retiree's paid off condo. 'vulture' investor buys condo for a song. HOA and/or HOA member(s) get a kickback.

I say this because I've seen some examples of this already: a friend asked me to investigate a condo foreclosure in Reno several months ago.

I told him to run, not walk away because this particular condo was owned 80% owned by a person who managed to have the county 'auction' off all his property tax and contractor liens for 10 cents on the dollar...to that man's lawyer. You don't want to be literally in bed with someone like that.

[Slimprofits]

Re: $1.2 million Tampa mansion for $10k

Actually no. The HOA's position in title is inferior to the lenders thus the lender has no incentive to pay the dues - they don't have to protect their investment. This is a rather interesting scam, bottom feeding at its finest but within legal boundaries.

you might also want to post that comment at the bankrate link

[lektrode]

Re: $1.2 million Tampa mansion for $10k

..Investors like Haught can rent out the homes, pocketing the income for months or potentially years until the bank finally forecloses — and they don't have to tell tenants that the lender could kick them out at any time.

whoa... no matter how fast 'the law' works, the scammers are faster...
how do they get away with this? never mind how is it 'legal'...
c/wouldnt the mortgage holder/bank (or hey, even the gov/taxpayers) come after them for the 'ill gotten gain' ?

[swgprop]

Re: $1.2 million Tampa mansion for $10k

whoa... no matter how fast 'the law' works, the scammers are faster...
how do they get away with this? never mind how is it 'legal'...
c/wouldnt the mortgage holder/bank (or hey, even the gov/taxpayers) come after them for the 'ill gotten gain' ?

It may be morally questionable but isn't illegal. HOA goes through a foreclosure process and I buy the property at foreclosure sale for the amount of delinquent dues. I now own the property subject to any existing mortgages against the property. It is mine to do as I please until such time as said mortgage holders do their own foreclosure - a process which is severely backed up in certain states like FL.

So I move in, or rent it out. The rental option is the morally objectionable component. The renters are not going to know about the delinquent status of the mortgage. So I collect a security deposit and several months rent. The mortgage holder forecloses at some point. And then one bright and sunny day there is a knock on the door and the renters learn that relocation is in their immediate future.

I, of course, will keep the security deposit too, cuz that's just the kinda guy I am.

[cjppjc]

Re: $1.2 million Tampa mansion for $10k

People are doing worse than this. Some people are pretending to be the owners of vacant properties, and renting them out to unsuspecting tenants. I mean when was the last time you asked your prospective landlord to show proof of ownership?

[aaron]

Re: $1.2 million Tampa mansion for $10k

god, it is so sad.

Here is another one, mentioned before, I am sure.

Current home "owners' who are underwater will go ahead and get a loan for a new house down the street. Then, they just let the old house go into foreclosure. If they are smart, and I suspect they are, they will rent out their old house while waiting 2 years for the foreclosure to go through.

[swgprop]

Re: $1.2 million Tampa mansion for $10k

god, it is so sad.

Here is another one, mentioned before, I am sure.

Current home "owners' who are underwater will go ahead and get a loan for a new house down the street. Then, they just let the old house go into foreclosure. If they are smart, and I suspect they are, they will rent out their old house while waiting 2 years for the foreclosure to go through.

Uh, except for the "new house down the street" part. If you are going to mess with people's lives you probably don't want them to know where you live.