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A Look at the Sketchy Practices of "Redemption Rights"

By Patrick following x   2018 Mar 28, 5:27pm 1,495 views   6 comments   watch   nsfw   quote     share    


http://www.wweek.com/news/2018/03/28/a-look-at-the-sketchy-practices-inside-the-hottest-real-estate-market-youve-never-heard-of/

Davee, 76, says he'd never heard of redemption rights. And he had no idea those rights, granted by Oregon law, allowed him to "redeem" or repurchase his home within 180 days after it was sold in a foreclosure auction—by paying whatever price the house sold for at auction, plus interest.

Given that Davee couldn't even afford his mortgage payments, there was no chance of that happening.

Vantage Homes offered him $300 for his redemption rights—and another $2,200 if Vantage bought the house at auction.

Davee signed the deal on July 1, 2016. Eleven months later, a Robbins-controlled company did buy Davee's house at auction, paying $183,200.

But rather than Vantage Homes, the buyer was another company Robbins controls, called Sean John LLC.

So one of Robbins' companies got Davee's house—but Davee never got the additional $2,200.

"I haven't gotten a dime of it," Davee says. "From what I can find out, the guy [Robbins] put it in another company's name. He's a shady dealer."

By buying Davee's redemption rights for just $300, Robbins controlled a home worth at least 600 times that amount for nearly a year, discouraging anybody else from buying it.

As for Davee, he became the victim of a practice virtually unknown outside a tight circle of real estate investors.
1   Malcolm   ignore (1)   2018 Mar 29, 7:36am   ↑ like (1)   ↓ dislike (0)   quote   flag        

It seems his agreement should have had (or affiliates or assignees) in the agreement.

Redemption rights are important. Everyone is made whole if an owner is able to get their finances in order.
2   HEYYOU   ignore (25)   2018 Mar 29, 8:44am   ↑ like (0)   ↓ dislike (0)   quote   flag        

There is no redemption for patnetters!
3   Hugolas_Madurez   ignore (4)   2018 Mar 29, 10:18am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Patrick says
Davee never got the additional $2,200.


Davee should've demanded the money upfront. In fucking cash. That's the only way to be sure.
4   georgeliberte   ignore (0)   2018 Mar 29, 10:25am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Davee should've demanded the money upfront. In fucking cash. That's the only way to be sure.
Or at least some form of escrow held by a third party, say a bank.
5   HeadSet   ignore (1)   2018 Mar 29, 10:25am   ↑ like (3)   ↓ dislike (0)   quote   flag        

Redemption rights should not be transferable. It seems that law was written to give a homeowner a second chance to recover his/her home after a foreclosure, not as a vehicle for investors to snag a cheap buy. This is like someone using FHA homeowner loans to buy rental property.
6   Malcolm   ignore (1)   2018 Mar 29, 10:27am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Satoshi_Nakamoto says
Davee should've demanded the money upfront. In fucking cash. That's the only way to be sure.


Pretty much a badly negotiated deal. The auction is public, the outcome would have been the same. He made $300 that he wouldn't have made otherwise.

I am curious what the $2,500 was really buying. Maybe it was so that he would let the house go to auction, instead of negotiating a short sale. This story is much to do about nothing, but a nice glimpse at how the foreclosure process works.

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