[WaPropertyLaw]

An inquiry & some background history on a specific property -

In April 2008 we began observing & documenting the short sale activity on a rural property just shy of 3 acres. It has been in preforclosure since October 2007.

We were doing due diligence on it in preparation of making a bid as the seller elected to withhold the Form 17 or provide any disclosure unless a buyer submitted a written bid.

Of the numerous other potential buyers, it's my understanding many submitted bids at the short sale asking price w/o researching it further.
(turns out most of those were rescinded before the 2nd lien holder quashed the deal)

-First my instinct told me there was a probable 2nd mortgage. There was & it put the amount in default at far more than the current property value.
I've since determined even the 1st mortgage appears to be more than the current value.

-Second we met w/county code enforcement & the health dept only to uncover no permits for any of the 4 outbuildings OR the main "residence" on the land, including no septic or electrical permits. Yes a a cease & desist/vacate order was issued 7 years ago. No it was obviously not enforced.
Code enforcement has just came by & condemned the 4 outbuildings w/the 1 main building in limbo. My guess it they will also condemn the main "house" if the property is not brought up to code within several months as it's now on their monthly inspection list.

-Third (& we thought we already knew the majority of this on 1st visual inspection) there are 10 years of debris ranging from motor homes, vehicles, axles, appliances to furniture & smaller items spread out over several acres.
It gets better....I went back after many months to take current photos for a BPO & offer to the bank after they foreclose (next week).
Discovered the home seller has been allowing someone to do "cleanup" in exchange for a place to stay.
Possibly a win-win right?
Yup, that's what I thought until I noticed there were twice the debris (inc additional junk vehicles) than when we first inspected it!
Apparently when they cut back the brambles they found all this?
Ok, but instead of it being hauled off (ie;cleaned up) it's now all scattered in the front of the property. Hello?

-Fourth, vandals/thieves have removed the deck, garden fence, flooring, fixtures & god knows what else from the main building.

-Fifth & most important, while talking to the on site "clean-up" person it was disclosed the 1st owner (not the current seller who supposedly had no prior knowledge) had been sited for allowing a local landfill to "dispose" of 3,000+ tires on the back perimeter of the property which he alleged is designated as a wetlands???

So here's my MAIN question/concern:

Can the bank sell this & claim no knowledge (even if that may be the case) w/o repercussions from buyers?

From what I've researched WA has eliminated the Lienholder Exemption for full disclosure correct?

* Elimination of Lienholder Exemption. The old law exempted a lienholder who acquired property through foreclosure or deed-in-lieu. That exemption is gone and lienholders who take property back must now comply with the law.
Effective Date. The amendments will become effective on July 22, 2007.

Also can the county come after the buyers to do post hazardous waste cleanup when there appears to be no lien on this particular code violation? :eek:
The enforcement officer had no mention of this in his notes.

If we were to still consider putting a (post foreclosure) bid on the property, I was only going to offer land value (per 2008 tax assessment).
Now it would be based on additional cleanup assessment.


How do I go about digging deeper w/o getting the entire property condemned? :confused:

[WaPropertyLaw]

Oops, meant "had been CITED for allowing a local landfill to "dispose" of 3,000+ tires"

My bad... :cool:

[Fr_Chuck]

If you are buying it as a "short" sale, you are not buying it from the bank but still from the owner, the bank merely approves or denies any short sale. So the bank has no responibility at all at that point.

I have issue with a second mortgage if any, since then you would not be able to do a short sale, since it would not clear anything but the original mortgage

Normally if you buy the property you also buy any environmental contamination that goes with it, That would include any soil contamination from oil or gas leaking from tanks also

I would not even use 2008 values, I would use current sale trends in the general area, most likely 20 to 40 percent less than 2008 values my guess. And I would deduct from my offer any and all costs of the clear up.
I may even add a clause that the current owner can be held liable for costs of clean up over >>> or something of that.

[Fr_Chuck]

See you added the tires, that cost to dispose of them, may be extreme, best way to dispose of them may be to grind them up to use them for driveway material

[WaPropertyLaw]

If you are buying it as a "short" sale, you are not buying it from the bank but still from the owner, the bank merely approves or denies any short sale. So the bank has no responibility at all at that point.

I have issue with a second mortage if any, since then you would not be able to do a short sale, since it would not clear anything but the orginal mortage

Normally if you buy the property you also buy any enviormental contamination that goes with it, That would include any soil contamination from oil or gas leaking from tanks also

I would not even use 2008 values, I would use current sale trends in the general area, most likely 20 to 40 percent less than 2008 values my guess. And I would deduct from my offer any and all costs of the clear up.
I may even add a clause that the current owner can be held liable for costs of clean up over >>> or something of that.

Let me be a little more concise -
We're not putting in a bid until the bank does take possession (next week) at the sheriff's sale.
Then it should be a straight forward foreclosure purchase.

For several reasons:

1)To get the sizable 2nd mortgage stripped.

2)Need a better idea of what commercial clean-up costs could run on over 2 acres of not easily disposable materials. Not a clue how to calculate this? :confused:

3)To negotiate w/the loss prevention/REO dept at the bank for a reasonable sum that is nowhere near what the remaining note will be.
Yes the property is currently mortgaged for more than twice what it's worth & then some due to the previously outlined conditions.

My question was -
If the county came out, cited the orig property owner & closed down his little hazmat operation...
Is there a lien or other pending action on that code violation?
If so, I'm guessing it carries over w/the property changing hands.
Like I mentioned there's no mention of it in the assigned code enforcement's officers files.


It appears the bank is legally obligated to disclose all prior property history & feigning lack of knowledge can only end up in a legal quagmire for ALL parties.
Even if they (bank) truly aren't aware, obviously I'll be bringing this development to light regardless if we purchase it or someone else does...