Owner finace gone bad real bad Mike WA chime in

IN MY LOCAL AREA BUT NOT TO ME: Nutshell version: People sold property to a guy He paid so much down And made payments all seemed well. He logged the property Left nothing but saplings. Dozed up and sold good soil (loam) Cleaned up all the old metal rented out the house. He collected sizable money for all this. NOW HE HAS DEFAULTED AND LEFT THE ORIGINAL OWNERS A MESS AND VERY DEVALUED PROPERTY? jUST WANTED TO GET YOU GUYS OPINION. Initialy seems like nothing they can do but forclose.

Yup. Scammers are around every corner, the buyer found a person to bamboozle. The seller shoulda had a downpayment equal to or greater the value of all the removable valuables of the proerty, to avoid this. Hard lesson learned.

In theory the trees and soil and buildings should be part of the contract/ lean on the sale of the property and probably was (can't remove those items without permision from the contract holder), but as you can see it's pretty easy to cash it in & be gone with the cash before anyone figures it out. Cash will be long gone - spent or hidden, so nothing to go after/ collect from the buyer.

--->Paul

In your country they are known a jippo loggers.

What state is the property in? There are some laws state by state, without knowing that, advice can only be limited.

How long was the land contract in place? acreage?

We had some scammers like that around here about 30 years ago. Came into town, rented office space, put out the word that they were buying timber land. "Lewis County Land and Timber"- sounded like a legitimate player (timber is big, in this county).

They were paying good prices for timber land, and attracted lots of interest. They would make an offer with $500 cash earnest money, invite seller to have seller or his own attorney draw up the papers. When papers were done, they would look to see if there was a "timber clause"-that is, a clause saying buyer can't log until he owns the property. If there was, they would back out ("our investor backed out, so sorry"), and seller would retain the earnest money. Nothing to arouse suspicion there- who would walk away from $500 if they weren't legit? But if there was no timber clause, they would go through with the purchase, and quietly start making monthly payments.

They did this until they had a dozen or so properties under contract- took probably a year. Then, overnight, they moved loggers into all the properties and started logging. Perfectly legal- payments are current, "timber is mature and we need to log so we can replant and get the timber into a rotation for future harvest. Don't worry about a thing. We're in this for the long haul."

You can guess the rest. . . of the story. As soon as they had logged everything, to the tune of a couple of million bucks, they decided that the property was "surplus to our needs", and big-hearted guys that they were, executed a deed back so seller wouldn't have to foreclose. "We're sorry for the inconvenience, and you are free to keep the payments already made." Even sent money for the recording fee, if I remember correctly.

And like the situation you described, it was all perfectly legal. Nobody could lay a glove on 'em. They knew just how far they could push it- by having seller do the papers, they avoided any arguments about disparity of knowledge or bargaining position between buyer and seller. What actually happened is that they would give seller a standard form Real Estate Contract when they made their offer, which didn't mention timber; seller, wanting to avoid paying attorney a couple hundred bucks, just filled out the standard form contract, and they were off to the races.

Your seller may be able to do something through the Consumer Protection Act- but barring that, you're probably right- can only foreclose.

Around here, "gypo logger" refers to a one or two man show, as opposed to the corporations like Scott Paper, Weyerhaueser, Port Blakely, Plum Creek, etc. Not necessarily a negative term- just describes the type of operation. I had a couple of gypo loggers log my place, and I couldn't have been happier with how it turned out. "Well, yeah, that big maple wasn't worth anything, but we peeked in your woodshed and decided you needed some firewood. Since we had the equipment here, we just laid it down so you wouldn't kill yourself trying to fall it. No charge, but we ain't cuttin' it up for ya." And I got 50% of full value of the fir, after others had graciously offered to log the timber for it, with nothing to me. Great guys.

Had something like that here. guy bought 80 acres mature trees with a no logging for 20 years clause. built a house. defaulted to the bank, FIL bought the property on the sherifs sale on the court house steps. then they logged it off, paid off the FIL. pocked the extra cash and saved 200,000.00 off of the origonal loan.

Sounds like Wall Street and the RETS that stole billions if not trillions

Lesson learned. There is no such thing as a free lunch.

If they wrote the loan correctly they can sue him for the difference in the amount owed and the value of the property. Just like if your car is repoed and its not worth enough to cover the loan the bank can come after you for the amount still owed.

Sad to say you cant trust anybody anymore in bussiness.Selling are farm now and have all kinds of offers for land contracts etc.Nope,noway ,no how.Not even to family.First thing I taught my boys,never do bussiness with friends or family.(Not that it cant work,but it just aint worth it).Also if you cant buy it right on your own,then you aint ready.

Good Luck

Stan