Trouble In Pre-foreclosures??
I have been looking up pre-foreclosures and have a couple of properties that I'm intrested in but recently was told that it might be illegal in FL to play the middle man. I plan on getting a contract in my name and then assigning it to someone else for a fee. Can anybody tell me if this is legal or should I go about it another way?
You will likely get some responses from FL on this. I am not an attorney, however, from what I have read, assignment of a contract is not illegal. You might chase down what you have heard and try to get the person who told you this to be specific about legislation against assignment.
There has been some recent law enacted at the Federal level concerning legal and illegal flips. There are restrictions on buying at one price and immediately selling at a higher price without materially performing some act that enhances the value of the property. You can look this one up. This law is the consequence of mortgage brokers, appraisers and sellers cooperating in finding an unqualified buyer and claiming the property is worth much more than it is. The lender gets stuck with someone who can't make payments and overstated collateral for the loan. It is possible that the person who gave you the information may be thinking of the anti-flipping legislation that went into effect last year.
Once you have the house under contract you are able to assign it to a 3rd party.
Keep in mind though that if your buyer needs conventional financing, you may prefer to have the owner place it into a Landtrust, and use the assignment of beneficial ownership method to avoid issues his lenders might raise on the Title-seasoning issue.
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