How Can I Assume An Unassumable Mortgage
I can buy this property for $14,000 needless to say its a dump, but worth it ,I think. However I dont really want to spend my own money on it, as this will slow down my cash flow. I was thinking of maybe a quit claim deed, If I make the payments on the owners behalf to the mortgage commpany and have a qcd. as back up, this wouldn't protect the seller though !! any suggestions!!
What is the exact verbiage that says it is not assumable. I work in mortgages and a lot of lenders will SAY the mortgage isn't assumable but the documentation says otherwise. It's usually on the disclosures.
[addsig]
andybell777,
You do not give much detail on the property so I can only give you this advice. A quit claim deed is not what you want to do. You could give the seller a agreed upon sum of money to walk and you would cure any late payments with the bank. Not knowing what you have in mind for this property it is hard to suggest any more then this.
Aare you looking at a rehab and sell or are you considering holding it as a rental, or do you plan on a flip to let someone else fix and sell?
Please let us know more about this situation and you might get some better advice. Maybe even advice to just keep looking.
Thanks for replying so quickly, I haven't seen the mortgage document yet but if its okay I will take a look and email you back and let you know,
Many Thanks
Andy
Thankyou Schallerp for your reply,
the mortgage is current she just wants to www.leave.I dont want to spend my cash and the property I would say is unmortgageable,, so I want to just take over her mortgage......which she tells me is unassumable !!!!!!!!
Sorry Schallerp, I have no idea where that www. came from? I plan on keeping it as a rental and using it also as storage for myself.
I have been in your situation so let me describe what I did and maybe the example is applicable.
The PIQ (Property In Question) was pretty well uninhabitable. The only thing of any consequence was that the roof did not leak. I picked it up by just taking a Grant Deed from the Person in Title. I recorded the Grant Deed and then I made the two payments that were behind on the mortgage. I then checked the title, (a little backwards) found that all was as represented. I did not buy a title policy, just a preliminary that looked good so I canceled out.
I went down to the mortgage company dressed in a pair of gray flannel slacks a white shirt and tie and wearing a Brooks Brothers Navy Blue Jacket. I looked like Mr. Respectable. I even carried a brief case with a copy of the Preliminary Title Report a Copy of the Grant Deed and a complete pictorial record of the inside and outside of the house. Looked a little like a bad copy of an Al Capp Cartoon. Only thing missing was Daisy Mae. Damn.
They were polite but distant. I handed them a copy of my financial statement as nice a piece of fiction as I have ever written. All my stocks were winners and some of my properties were, (most rare in LaLa Land) Free and Clear. Shhh except the taxes and an unrecorded Agreement to Purchase.
I presented my business card and they ask'd what my plans were for the house. I informed them that I really missed Korea and the battlefields so I was going to move into the property and enjoy the atmosphere of total neglect. Yes I would of course repair and restyle the dwelling. After all the sizzz of escaping water from ruptured pipes did create a most unpleasant sound.
Anyway they asked me to pay a point on the loan and I would be the new Trustor on the Note. I offered as a gesture of good faith to open an account. I withdrew from my wallet two twentys and a ten. They got hung up on the safety pin but I finaly broke them free and tendered. For some reason they were not impressed. We parted friends.
May I suggest in the absence of a better plan you just do what I did. Offer to save the banks a$$ by fixing up the property and keeping the payments and taxes current. Please do not hold your wallet closed with a safety pin, it sort of creates a negative impression.
The End. Lucius
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[ Edited by Lufos on Date 03/01/2004 ][ Edited by Lufos on Date 03/01/2004 ]
Thanks Lufos,
I guess my other option would be to just chance it and make the payments and if the bank did bring up the due on sale clause then just pay them.
Oh, I get it. Subject to isn't assuming the mortgage - the owner's confused.
Your confused, ...how do you think I feel.
I just want to get this house without using my cash. She has a mortgage on it and I want to take over that mortgage, she says it is unassumable but is probably not the sharpest tool in the box so she could be wrong!!! If I take over payments I need some sort of security and this is where I get stuck.....HELP anyone !!!!!!!!!!!!!
What you need is a good subject to course. That will guide you step by step. There are never any guarantees that the DOS clause won't be activated but 9 times out 10 it will not and I'll take those odds. Check in the Shop section of this site or google.
Good Luck!
Thanks Lassiter,
I think youve hit the nail on the head, by the way you dont have any accomodation for use for a week or ten days for a skiing trip by any chance??? as I saw you had some condos.
Nothing available today but I'll keep you in mind. Good Luck!!
andybell777,
Please keep in mind that most mortgages today are not assumable. However, you can take it subject to the existing which it seems like you know about this.
Get the property and then do with it as you need. If done properly, the bank or lending institution may never know that the original owner is no longer making the payments.
I f you can option the property, get it in brrom clean condition and try to pass it on to another investor. If he buys for 20k or even accepts a contract assignment for 3 k, you're still making 3-7k without spending a dime.
Subject-to will work. The lender will not likely notice. If you expect to get in and fix the place you will likely be done before they would notice. Even if they did it takes months to foreclosre. You would finish the repairs and then refinance/sell so they get paid off.
A better idea might be to just do a lease/option. You agree to pay monthly the amount of the mortgage. Have it sent to an escrow account where both you and the seller know the payment is being forwarded to the lender and records are being kept.
The option is to buy the place for the present loan amount or what ever you were already thinking. This way you ahve control while not having to worry about a title change bothering the lender.
There are some variations but the two ideas above work just fine.
John
Thanks John and everyone else who replied, I really do appreciate your input. It is great to have such a wealth of knowledge to draw upon. I think I am going to go for the lease option route if the seller will accept it. It s going to be interesting trying to explain it.
Just say, "what if I could cover your mortgage payment for a period of say two or three yers and then cash you out after that time at or close to your full asking price. Is that something we should talk about or not?"
Thanks Lassiter, I guess its just knowing the correct terminology. I will memorize that line and give it a try.