Seller's Credit If Due On Sale Triggered
Okay, new to this, so forgive me if I'm asking a silly question.
Say I buy a house from Bob Subject To existing financing... Then, I put the insurance in my name with the mortgage holder as a beneficiary... and then Bob as the alternate beneficiary (or whatever... I skimmed over it in another post)....
Of course, changing the insurance alerts the mortgagor that title may have changed hands... In the unlikely event that the bank calls the mortgage due... what would show on the mortgagee's credit report?
Is this 'acting on their right to call the full amount in' going to show as the beginnings of a foreclosure? Will it show anything negative at all?
And, when I realize that the bank has called the loan due, what is the usual time period there? 1 month to pay it all? 3 months?
Thanks all...
-Mike in New Orleans
I'm certainly no expert on the RE side of the question, but the CRA's don't have a notation for "DOS called in"
If it's late, it will report as late. If it's not, it won't. As for the timeframe they give before initiating foreclosure, I don't know... but if it's not late, why would they call it in?[ Edited by thestudentisready on Date 05/27/2004 ]
Thanks for the quick reply...
BUt, that's why I said "in the unlikely event that the bank calls the mortgage due"...
They don't have anything for DOS... but, they do have a place for comments. I'm just wondering if anything negative would show ANYWHERE in this scenario.
-M
I understand. I think your protection is in the logistics, though. It won't report anything negative unless the terms are in default. If the payments are up to date, but they call in the loan, I don't know how much time they'll give, but it's in their interest to give you SOME time if they believe you can get it refinanced.
After all, they have legal fees, etc. once they decide to initiate foreclosure, so it stands to reason that they'll give the seller enough time to get a new loan... assuming of course that whoever would be getting the new loan is a worthy loan candidate at the time and has the option available of finding new financing.
Again... no RE pro here, just looking at their motivations.
I believe that any answers you get here will be similar to those already given. I don't believe that I've seen a single post from anyone on this site that had a DOS called on a sub2 deal yet.
So, I believe that it would be rare for anyone to have an answer based on anything but speculation.
Jeff
some state have60-90 days when accellerating the loan(DOS). DOn't get the insurance in your name. Get another policy or put it in trust and get a policy.
Get creative
[addsig]
If you have access to the commonly used mortgage agreements (either from your own house or online), you'll see that most contain clauses outlining "acceleration of payment" and what the time frames are--I've seen anywhere from 30 days to 90 days.
Andy
In the last five years i have been taken property subject to i have had one loan called. it did nothing to the sellers credit because i paid it off. Just pay it off and nothing will happen to their credit, dont pay it off and they have the right to initiate foreclosure proceedings based on clause 17 or 19 (the acceleration clause). Or you can take them to court that has worked for me too and the bank just backed off and today I am still paying on that seller loan. :-D Good Luck
Thanks guys. I just want to be able to reassure the seller that their credit won't be affected.
-M