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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] A 50/50 net equity split is fair to buyer and seller... Posted by Ward-CA- on October 19, 2003 at 4:25 PM In Reply to: posted by Troy C on October 19, 2003 at 12:18 AM : Ward : First of all outstanding website! : I am confused about the laws of what a "Foreclosure Consultant" and an "Equity Purchase" is. It may sound dumb but reading both California laws, it would seem, to do an equity purchase, you would be acting as a Foreclosure Consultant. If so the law states you may not take interest in the property.{2945.4(c)} : Also how much of a discount from market value as well as how much equity should the owner get. I feel this is important to stay out of legal scrutiny. : Thanks Troy -=-=-=-=-=-=-=-=-=-=-=-=-= Troy, The focus of Civil Code §2945 is on parties who, acting as foreclosure consultants, collect advance fees from defaulting owners for providing some sort of foreclosure service. With a few notable exceptions, such as attorneys and certain lenders, the State of CA wants to quash such activity and accomplishes it via §2945. The focus of Civil Code §1695 seeks to level the playing field of negotiating the purchase of a defaulting owner's property at a conscionable level of fairness. It does that by mandating a 5 day cooling off period, explicit contract provisions and threatening draconian penalties for taking unconscionable advantage of homeowners in foreclosure. Obviously lopsided deals, where the foreclosure speculator is co-opting more than 50% of the owner's net equity, are ripe to being set aside and bring down the wrath of the authorities. If you think I exaggerate, I invite you to study the Orange County case of Onofrio v. Rice, (1997) 55 Cal App. 4th 413. Too many out-of-state gurus, like Russ Whitney and Ron Legrand, don't seem to be that well versed in CA's strict consumer laws concerning foreclosure speculation. Maybe it's their naiveté, or perhaps because they're outside of CA that they don't care to take pains to inform their CA students of the above cited codes. In any case, their trainees don't have a clue of using equity purchase contracts with the CA required clauses, the required 5 day cooling off period nor the required Notice of Cancellation form. In my humble opinion, I think you'll avoid a lot of problems if you do a 50/50 split of the owner's net equity. That's probably what you'd want if you were in the owner's shoes, right? Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward : : First of all outstanding website! : : I am confused about the laws of what a "Foreclosure Consultant" and an "Equity Purchase" is. It may sound dumb but reading both California laws, it would seem, to do an equity purchase, you would be acting as a Foreclosure Consultant. If so the law states you may not take interest in the property.{2945.4(c)} : : Also how much of a discount from market value as well as how much equity should the owner get. I feel this is important to stay out of legal scrutiny. : : Thanks Troy : -=-=-=-=-=-=-=-=-=-=-=-=-= : Troy, : The focus of Civil Code §2945 is on parties who, acting as foreclosure consultants, collect advance fees from defaulting owners for providing some sort of foreclosure service. With a few notable exceptions, such as attorneys and certain lenders, the State of CA wants to quash such activity and accomplishes it via §2945. : The focus of Civil Code §1695 seeks to level the playing field of negotiating the purchase of a defaulting owner's property at a conscionable level of fairness. It does that by mandating a 5 day cooling off period, explicit contract provisions and threatening draconian penalties for taking unconscionable advantage of homeowners in foreclosure. : Obviously lopsided deals, where the foreclosure speculator is co-opting more than 50% of the owner's net equity, are ripe to being set aside and bring down the wrath of the authorities. If you think I exaggerate, I invite you to study the Orange County case of Onofrio v. Rice, (1997) 55 Cal App. 4th 413. : Too many out-of-state gurus, like Russ Whitney and Ron Legrand, don't seem to be that well versed in CA's strict consumer laws concerning foreclosure speculation. Maybe it's their naiveté, or perhaps because they're outside of CA that they don't care to take pains to inform their CA students of the above cited codes. In any case, their trainees don't have a clue of using equity purchase contracts with the CA required clauses, the required 5 day cooling off period nor the required Notice of Cancellation form. : In my humble opinion, I think you'll avoid a lot of problems if you do a 50/50 split of the owner's net equity. That's probably what you'd want if you were in the owner's shoes, right? : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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