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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
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Experience:  Licensed to Practice Law
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What is the approaximate time on Foreclosure on commercial

Customer Question

What is the approaximate time on Foreclosure on commercial properties in OH? I am interested in buying a non performing note in OH on a commercial property. It has been in default in 2011The affidavit in support of motion to appoint a receiver has been filed in July 2012 and A receiver is appointed in Nov 2012.

I am trying to understand how long it will take me to foreclose and take the property back if I purchase the non performing loan? Also, how much I should expect to pay in legal fees including all expenses?

thanks
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  TJ, Esq. replied 1 year ago.
Hello and thank you for allowing me the opportunity to assist you.

If the foreclosure is not contested, then it would likely take about 9 months. If the foreclosure is contested, then it is impossible to guess since litigation could last for years in a worst case scenario (though 12-15 months is probably most common).

I am curious as to why you would purchase a non-performing note. You stated that you would like to know "how long it will take me to foreclose and take the property back." You do realize that you would be required to purchase the property at the foreclosure sale, right? And any bid higher than what is owed on the note would go to the current owner. For example, if the property is worth $100,000, and the balance of the note is $60,000, then I would expect there to be other bidders at the foreclosure auction. If the property actually sells for $100,000, then you (as note holder) would get $60,000 plus expenses to foreclose. The remaining surplus (~$40,000) would go the current owner. So, I would not purchase the non-performing note unless you are getting a steep discount on it.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is much appreciated.

Thank you for using our service!
Customer: replied 1 year ago.

can you clarify what you mean with your answer and also answer my questions below?


 


the owner is upside down and owe more on the note than what it is valued. I am trying to buy the note from the current lender 30cent s on a dollar. I need to figure out if my expenses to take the property back will be equal or less than what I spend. Ultimately I want to own the property and collect the rents. So it is important for me to understand the process to get the ownership of a commercial property that has a non performing note.


 


 


You wrote"


 


"You do realize that you would be required to purchase the property at the foreclosure sale, right? ( after I purchase the note the only way I can get the property back is to offer it at Foreclosure Auction in state of Ohio?


 


You wrote:


And any bid higher than what is owed on the note would go to the current owner. ( you mean the current defaulted owner of the property?)


 


For example, if the property is worth $100,000, and the balance of the note is $60,000, then I would expect there to be other bidders at the foreclosure auction. If the property actually sells for $100,000, then you (as note holder) would get $60,000 plus expenses to foreclose. The remaining surplus (~$40,000) would go the current owner. ( you mean the current defaulted owner of the property?


 


Can you Please answer these with a simple language. based on the info below


Affidavit in support of motion for appointment of receiver has been filed in July 2012 and a Receiver has been in place since Nov 2012 I am trying to understand


 


1) how long it will take me to foreclose the property to get the property back once I purchase the note?


 


2) What processes it will entail, court or trustee sale?


 


3) How much I should expect to pay in legal fees/court fees including everything till I get the property back?


 


4) Once I purchase the note, does the court appointed receiver stay in place and pay me the rents that is being collected from tenants?


 


thanks


 


 

Expert:  TJ, Esq. replied 1 year ago.
Hi again.

Q: "You do realize that you would be required to purchase the property at the foreclosure sale, right? ( after I purchase the note the only way I can get the property back is to offer it at Foreclosure Auction in state of Ohio?

A: Yes, that is correct. The security interest gives you the right to foreclose on the property ... it does not give you the property outright.

 

Q: And any bid higher than what is owed on the note would go to the current owner. ( you mean the current defaulted owner of the property?)
A: Yes, the current defaulted owner. The property remains his until after the foreclosure sale, so any surplus from the sale goes to him.

 

Q: For example, if the property is worth $100,000, and the balance of the note is $60,000, then I would expect there to be other bidders at the foreclosure auction. If the property actually sells for $100,000, then you (as note holder) would get $60,000 plus expenses to foreclose. The remaining surplus (~$40,000) would go the current owner. ( you mean the current defaulted owner of the property?
A: Yes.

 

Q: 1) how long it will take me to foreclose the property to get the property back once I purchase the note?
A: It'll likely take several more months ... possibly 9 months or more, though it could be faster. It would particularly be faster if the judge allows the receiver to sell the property in a private sale rather than a public auction. But a judge would only allow that if there were unusual circumstances that made it a necessity to protect the creditors' interests.

 

Q: 2) What processes it will entail, court or trustee sale?A: Ohio is a judicial foreclosure state (as opposed to a non-judicial foreclosure state), which means it needs to go through the court. That's why it can take so long.

Q: 3) How much I should expect to pay in legal fees/court fees including everything till I get the property back?

A: It depends on how much legal work needs to be done. If the current owner does not dispute anything, then it may just cost $1000 in legal fees. But if the current owner disputes something (e.g., the default, the right to foreclose, etc.), then it could cost several more thousand dollars.

 

Q: 4) Once I purchase the note, does the court appointed receiver stay in place and pay me the rents that is being collected from tenants?
A: No, it's not that simple. The receiver can continue to collect the rent, but it will first go towards various fees such a court fees, receiver fees, applicable property association fees, etc. You may get nothing from the rent.
Customer: replied 1 year ago.


thanks for your reply; Please see my questions in Bold that needs clarification

 

you answered: Yes, that is correct. The security interest gives you the right to foreclose on the property ... it does not give you the property outright.

 

1) Is there a way to get the property back?

a) As the note holder, can I forgive the Mortgage Debt owed to the note holder?

 

b) In exchange for the forgiveness of the loan, can I take the ownership of the real estate?

 

c) If I can forgive the loan in exchange for the ownership, do I have to this through court or by attorneys with an agreement with the current defaulted owner?

 

d) What happens to judge and court receiver?

I asked:

Q: 4) Once I purchase the note, does the court appointed receiver stay in place and pay me the rents that is being collected from tenants?

YOu answered: No, it's not that simple. The receiver can continue to collect the rent, but it will first go towards various fees such a court fees, receiver fees, applicable property association fees, etc. You may get nothing from the rent.

 

QE: ( if the current monthly income is more than the all the fees above do I get the remaining after all the fees). Current monthly income varies between 8K to 12K.

 

Q: How much authority do I have on the receiver as the note holder, Can I tell him to apply my rules and regulations while running the property in receivership?

 


thanks

 

 

Expert:  TJ, Esq. replied 1 year ago.
Hi again.

you answered: Yes, that is correct. The security interest gives you the right to foreclose on the property ... it does not give you the property outright.

 

1) Is there a way to get the property back?

a) As the note holder, can I forgive the Mortgage Debt owed to the note holder?

A: Yes, you can do that.

 

b) In exchange for the forgiveness of the loan, can I take the ownership of the real estate?

A: Yes, the current owner may certainly deed the property to you in exchange for a release of the note. That is called a deed in lieu of foreclosure. Bear in mind that it is entirely voluntary on the borrower's part. You cannot force him to do that.

 

c) If I can forgive the loan in exchange for the ownership, do I have to this through court or by attorneys with an agreement with the current defaulted owner?

A: You can do it by agreement outside of court.

 

d) What happens to judge and court receiver?

A: The case can be dismissed and they will not be needed.


I asked:

Q: 4) Once I purchase the note, does the court appointed receiver stay in place and pay me the rents that is being collected from tenants?

YOu answered: No, it's not that simple. The receiver can continue to collect the rent, but it will first go towards various fees such a court fees, receiver fees, applicable property association fees, etc. You may get nothing from the rent.

 

QE: ( if the current monthly income is more than the all the fees above do I get the remaining after all the fees). Current monthly income varies between 8K to 12K.

A: Yes, you would eventually get the money in those circumstances.

 

Q: How much authority do I have on the receiver as the note holder, Can I tell him to apply my rules and regulations while running the property in receivership?

A: No, you cannot control how the receiver manages the business/property. You're just the note holder (i.e., just a creditor) and not the owner.

I hope that helps. Kindly remember to rate me. Thank you.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 9774
Experience: Licensed to Practice Law
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