Omni to leave Detroit.

[JBMcB]

To Bailey:

Normally, you would not let a property be sold in foreclose IF you thought the property was worth more than the loan balance - especially, if you gave a personal guarantee to the lender.

Normally, wouldn't the holder of the note have a lien on the property if it's in default? How did it get sold?

Also, when a property gets sold, if there are any outstanding debts on it, they are listed on the closing papers. If you are the buyer and they are still on there, you are responsible for them, period. If you made a deal to get rid of them with the previous owner, then they had better not be on there when closing, otherwise it doesn't really matter what the previous owner promised, because, legally, you are responsible. Property contracts and transactions are immune from verbal agreements, everything needs to be in the closing contract or it doesn't matter.

[Packman41]

Normally, wouldn't the holder of the note have a lien on the property if it's in default? How did it get sold?

Also, when a property gets sold, if there are any outstanding debts on it, they are listed on the closing papers. If you are the buyer and they are still on there, you are responsible for them, period. If you made a deal to get rid of them with the previous owner, then they had better not be on there when closing, otherwise it doesn't really matter what the previous owner promised, because, legally, you are responsible. Property contracts and transactions are immune from verbal agreements, everything needs to be in the closing contract or it doesn't matter.

The lender does have a first mortgage lien on the property. The property is sold at a foreclosure sale and anyone can bid on it, but subject to the liens in place. If the first mortgage lender has the highest bid then it is sold to them and wipes away the junior lien holders. If the highest bid is less than the amount of the outstanding first mortgage, then the lender can go after the owner personally for the difference between the amount owed and the winning bid amount.

Whenever an owner has a foreclosure and then a lawsuit for the deficiency amount then other lenders are sure to notice -- and not in a good way.

[lincoln8740]

If the highest bid is less than the amount of the outstanding first mortgage, then the lender can go after the owner personally for the difference between the amount owed and the winning bid amount.

.

Not if the loan was non-recourse.

or
the "owner" is an LLC[[or some other formation) which has no other assets and is now defunct, making the individual people that are a part of the group virtually judgment proof.

[Packman41]

Originally posted by Lincoln8740:
"Not if the loan was non-recourse.

or
the "owner" is an LLC[[or some other formation) which has no other assets and is now defunct, making the individual people that are a part of the group virtually judgment proof."

This is all true, except the article http://detnews.com/article/20100909/...#ixzz0zWIKGAcj specifically states that, "The lawsuit says the Ferchill team has an outstanding balance totaling $24.5 million on its loan, including fees and penalties. Wells Fargo and Capmark want the Ferchill officials to pay off the $5.5 million gap that the $19 million foreclosure sale price a week ago Thursday didn't cover, according to the lawsuit."

Banks are notorious for requiring personal guarantees from the individuals that comprise the LLC and not just the LLC. In light of the lawsuit that has been filed it appears Wells Fargo has personal guarantees from Ferchill officials.

[lincoln8740]

Banks are notorious for requiring personal guarantees from the individuals that comprise the LLC and not just the LLC. In light of the lawsuit that has been filed it appears Wells Fargo has personal guarantees from Ferchill officials.

Agreed as to right now but during the previous fifteen years, banks rarely asked for a personal guarantee.

People made a lot of money, espescially on buildings in Detroit.

If you had a good appraiser--the sky was the limit

[Danny]

Oh well! there goes a piece of a be Coleman A Young's Detroit's Renaissance plan.