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to Watch Out For Scams
Furthermore, the net profit from a trustee sale is often considerably more than that of a foreclosure auction. Along with the increased publicity surrounding a trustee sale that tends to bring more potential buyers, those buyers will often pay more at a trustee sale because they will receive a property free of all claims and encumbrances. Finally, what a creditor has to give up in order to ensure a meaningful distribution to unsecured creditors may ultimately be less than what the creditor would lose after the costs of foreclosure and the increased value of a trustee. Assuming a trustee is able to negotiate a carve-out agreement with a secured creditor, the court must still approve that agreement. Although a clear test for acceptance of these agreements has yet to develop, recent court opinions have focused on the need for a carve- out agreement to provide a meaningful distribution to unsecured creditors to garner the court’s approval. What is a meaningful distribution? That remains unclear. However, one court made it clear that an agreement that provided for the payment of administrative claims alone does not qualify as a meaningful distribution. See In re All Island Truck Leasing Corp. 2016, Bankr. LEXIS 634 (Bankr. E.D.N.Y. 2016). Clearly, sufficient assets must be left after priority claims, including tax obligations, which are paid to provide for some type of distribution to unsecured creditors. For a trustee who is considering the possibility of negotiating a carve-out agreement, the importance of knowing the accurate tax basis for the property cannot be understated. The sale of the property may result in a capital gains tax obligation that will take priority over unsecured creditors. If payment of that tax obligation leaves nothing left for unsecured creditors, it is unlikely that the court will approve the agreement. Consult with an experienced tax professional to be certain you know what the tax basis for the property is before you enter into negotiations for a carve-out agreement. What Is a Meaningful Distribution?
Imagine coming home to find that you are on someone else’s property.
The scammers picked your home to take. They did some basic internet research to find out your personal information, and they created fake IDs. They obtained the proper forms, forged your signature, and filed the papers with the authorities. They own your home. You have been a victim of deed fraud. Unfortunately, many homeowners do not know how to spot — let alone protect themselves from — real estate fraud. The American Bar Association highlights some of the many ways scammers can get your home out from under you, including the following: • ‘Saving’ You From Foreclosure Scammers say that you can transfer the title to them for a small amount of time, paying rent to them instead of to your mortgage so you can catch up. Instead, these people often sell the home once they have the title in their name, and you are still stuck paying the mortgage. • The Straw-Man Scheme Essentially, a scammer gets a mortgage on a home by providing the credit history of a straw man, or a less skilled criminal. The scammer then gets the straw man to sign over the deed, which often nets the straw man some money. In the end, the straw man is often the person who gets prosecuted for this crime. • Illegal House Flipping The criminals purchase a home and maybe make some minor improvements. Then, they sell the home for much more than it is worth. By the time you realize that your home’s value is way lower than what you paid for it, it is too late. The possibilities are endless, and scammers often leave long and complicated trails of fake information to sift through. So, how can you protect yourself against these sophisticated criminals? According to the FBI, the best thing to do is stay vigilant by regularly checking in at the county deeds office. All of the records related to homes and businesses are stored in the deeds office and are public information. By checking regularly, you can tip off the proper authorities if and when you find a forged signature or any other suspect information in your home’s file.
Michelle J. Adams, Esq. Adams, Morris, & Sessing
12850 Middlebrook Road Suite 308, Germantown, MD 20874 Phone (301) 637-0143 x 101 | Fax (888) 614-7163 Michelle@amslawgroup.com | www.amslawgroup.com
Short Sales and Real Estate Licensees — Real Estate Commission
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