Subject 2/DOS Question

Let's say you buy a property SUB 2 from a seller & get a buyer in who has made payments on time through a LSC for 2 years. Now it comes time for them to re-finance. The buyers then goes to a lender and applies for a mortgage.

Won't the fact that they are seeking a mortgage for a property that already has mortgage set off a DOS clause? WOn't the lender look at the property, run title and see that someone else is on it?

Also, I'm assuming that I have keep the deed in my name(or LLC) until my buyers refinance. That's a land contract or contract for deed, right?

Any help would be appreciated. THANKS

Comments(4)

  • mwinburn25th February, 2004

    Well if you bought the house subject-to, then the deed is in your name. When you go to refinance, you willcut a check to pay off the first one, so the DOS clause shouldn't matter.

  • samedwin26th February, 2004

    Seeking new financing will not give any indication to the old mtg holder that the property has changed hands.
    Remember that the mtg and the deed are 2 entirely separate things. 1 has nothing to do with the other (unless you are getting near the end of a foreclosure LOL).
    What you propose is CFD or Land contract, yes.

  • rajwarrior26th February, 2004

    "Won't the fact that they are seeking a mortgage for a property that already has mortgage set off a DOS clause?"

    The majority of homes sold in the U.S.A. still have mortgages/liens against them. People put their houses up for sale even though they still have a loan against it, and the new buyer gets their own financing to buy it.

    At closing, the old loan is paid and if any is left over, the seller gets a check.

    Roger

  • InActive_Account26th February, 2004

    Thanks for the clarification everyone. I appreciate it

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