Buying Foreclosures SubTo & Getting -ve Credit History Too!
A loan is attached to a SS# right... when you take over a loan SubTo that has a history of delinquncies I have been told that in CA, the negative credit history now ends up on your credit.
Can a trust sheild you from this?
You do not inherit someone else's bad credit. The existing loan is not transfered to you, and is not attached to you. In a Sub2 transaction it remains in the seller's name.
I believe that you got bad information.
You do not "inherit" deliquencies from anyone unless your name is on the loan also.
Though I am sure the bank would be thrilled to add another person's name to the loan so they have someone else to go after in the case of a deliquency, you don't do that in Sub-to's.
That should be one of your selling points to the Seller, is that you will help them with this portion of their credit by making timely payments.
Say WHAT,
How did you come about this information?
jeff12002 is 100% correct.
[addsig]
The loan history appears on your credit history only if you formally assume the loan. Subject-to you do not assume or take over the loan, the loan stays in the original borrower's name and they are still responsible for making the payments. You are just relieving them of the payments. Their primary motivation must be debt relief.
I was told this surprising piece of info by a very respected REI guru at our local club "meeting" ($25 entrance fee... rip)
I was just as surprised to hear this as you were so I thought I would ask.