I present for your consideration you the strange saga of 4100 Gray Fox Court, a vacant lot in the rarefied confines of ArrowCreek. It was purchased for $448,081 in October 2005 with a $375,360 1st loan from IndyMac, who subsequently sold the loan to Deutsche Bank, who packaged it in MBS. The owner took out a 2nd loan for $50,178 in February 2008 from local contractor Pinnacle Drywall (the connection seems to be the ill fated Highland Place development, which is another saga for a later date).

On 11 April 2008, the owner deeded the property back to Deutsche Bank in an apparently unilateral Deed in Lieu of Foreclosure (3639231).

On 14 May 2008, The HOA filed a Lien for $3,120 in delinquent HOA dues.

On 19 March 2009, Deutsche Bank filed a NOD on the original first loan, rejecting the attempted DIL.

On 9 October 2009, the NOS was filed with a due amount of $434,369.

On 11 December 2009, Deutsche Bank took back the property at a Trustee’s Sale for $88,500 (3865254). Or so they thought. There was another drama going on.

On 31 July 2008, the HOA had refiled a Lien for delinquent dues, this time on Deutsche Bank based on the recorded DIL (3674478).

On 18 December 2008, the HOA filed a NOD. Another NOD was filed on 7 October 2009, with $11,062 now in arrears.

Today, a second Trustee’s Deed was recorded by the HOA, transferring the property to a private 3rd party, with the amount owed and amount paid being $50,400 (3865254). I can’t for the life of me find the NOS, but it may exist.

So who owns this property now, the 3rd party or Deutsche Bank? ArrowCreek HOA was pursuing action against DB, believing that they owned the property. DB says uh-uh, not us, we never took it back. Still, DB was in 2nd position when they (thought) they took back the property, and should have had to pay off the HOA in 1st position to gain title at the Trustee’s Sale. Is the property worth the legal fees it is going to take to sort this all out?

I’m interested in your comments about another trend I have been seeing – banks recording a reduced amount of debt owed at Trustee’s Sales. Where I’ve been seeing this is at really low end properties (Smithridge, DeLucci, Highwood) and at the Grand Sierra. For instance, 506 Smithridge went back to the bank today with a purchase price and amount of debt being recorded as $58,987 (3864964). The amount owing was shown as $164,002 in the NOS. Can the bank still 1099 the owner for the amount of forgiven debt when they record that the debt doesn’t exist? Are the banks so afraid that these loans could be found to be fraudulent that they are playing nice-nice? I haven’t a clue, just another “Huh?” moment. What do you think?

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