Unpaid Balance V. Total Indebtedness
I spoke to a bank today to try an by a note. They said they would sell the note for the "total indebtedness", and I said, oh the opening bid at the auction?
She said no and was to busy to educate me.
Would some one here educate me as to what total indebtedness is?
thx.
helloworld,
It is obvious you have done a lot of research on this issue and in my opinion, the reason you have not found the answer is because there is no guarantee possible. All real estate is a risk and we can only manage the risk to the best of our abilities.
All of the information you have found are peoples opinions. My opinion is that the risk is not great enough to me to stir up trouble. Each note I have signed has a clause that addresses remedies for default. Typically, this remedy for default give the borrower X amount of days to cure the default.
The way we approach it in my case: When we transfer the property to the LLC, all members of the LLC sign a deed transferring the property back to the individual on the loan and we notarize it. We do not record this document and simply file it in our records.
In the event the DOS is triggered, the plan is to then record this document and show the lender that the property is now in the name of the borrower, thus curing the default. Have I done this before? NO. I have never had to do this so I do not KNOW that this will work.
My worst case plan is that if all else fails, I will put the property on the market and sell it before they go through whatever process they need to to call the loan due. I do not know if this is an option for you.
In the end, I do not believe the risk is great enough for me to worry about. As you mentioned in your post, the only way to know for sure (100%) is to get it in writing from the lender prior to the transfer. but do you really need 100% on this issue? Only you can answer that question.
JS.
Firstly, even if it were called, DOS is a civil, not criminal offense. It is one of those things that lawyers an gurus love to make you worry about. Especially if you get a personal loan, deed to LLC, and get called. To calm them down, if yoiu must, simply deed it back.
I have bought and sold many properties sub2, and never had a problem after changing title. Yes, it could happen. It probably even has, in some odd, unusual case. And note that if you do get a letter suggesting they know you are on title but not on the loan, ignore it, at least the first letter. They may bluff a time or two.
I bought a house sub2, gal had a BOA mortgage I took over, a year later she was buying a house in another state, using BOA again. Her DTI was bad due to the other mortgage still being on her credit, so I explained we were managing the property, paying the payments, and we going to buy it and pay off the mortgage. She got the new mortgage, and no problems resulted for me. DOS is a paper tiger.
Sounds like a decent downstroke. Not quite a hard money deal because LTV at those numbers. Some Soft Money Lenders may do it. Whats the appraised value? who holds the REO since they may be a source of capital? Buyers credit? full doc or stated?[ Edited by JohnLocke on Date 04/22/2009 ]