Selling MH Using Subject 2 Method
Can someone advise me on the steps to selling a MH using Sub 2 method. Is it necessary to involve an attorney? Once you have the Bill of Sale and Promissory Note filled out what is the proper procedure when filing it. These may sound like crazy questions but I need to have all my steps in order, I don't want to do this deal only to find because I didn't cross every T it's null and void. :-? :-o :-?
If I was doing this deal I would have my lawyer draw up the documents and let the other side review them.
You want to have a collection service collect the funds each month and post them on to the lender. This allows all parties to be able to track the payments and to be able to tell early on if something has gone missing. Taxes and insurance or MH park rent could be dealt with in the same way.
The insurance has to be correctly worded so that the lender is protected and then the sub-2 buyer while at the same time no triggering the DOS.
The property will be owned by a land trust or living trust (depending on which label your attorney likes). The equitable owner will be the seller (prior owner) and the beneficial owner will be the buyer (new owner). When the obligations taken on by the buyer are met (normally the loan is paid off) then the equitable title will be transferred. Like a long dates escrow.
A letter can be sent to the lender showing the transfer of to the trust as such a transfer is complete legal. Very much the same as when you take your home and put it in a living trust for estate planning purposes. The lender can not invoke the DOS against an owner using a living trust for estate planning purposes. That is the loophole that makes a Subject-2 deal work cleanly.
John
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