:F I have a divorced couple who are in the forclosure process and want to get out before the bank completely forcloses on there property in about a week or so. The property is worth around 135k and they owe after the back payments 7k are paid 118k. they dont want anything for there equity. i was figureing i could get there property out of rears by paying what the bank will require and have them deed the property with a warranty deed contract to me. Im sure its the loan is not assumable but with the interest rates as low as they are im also sure the bank isnt going to call the loan due if by chance they even find out im taking title to the property. this property is in texas and also its in a nice neighborhood. any help would be appreciated. thanks in advance.
Joe
Hey Joe,
I’m going to tell you something which a lot of people may choke on, but real is real.
I treat all loans as assumable.
The reality is that these banks generally don’t know anything other than they get a payment or they don’t. Some minimum wage secretary sifts through and logs payments recieved by loan/account number. Since most lenders of this type have so many loans out there, it’s not like they detail every single one as their top priorty, your just a number to them which owes money. I generally just mail the payments as usual without any other action. If they accept the first payment without any objection, it is very hard legally to overturn the precedance they have set by already accepting that payment. Just like a landlord who accepts a partial payment from a tenat in arrears, you never accept partial payments to forestall eviction, it’s all or get out.
In a few rare instances where I have reason to believe they may notice/object, I go down to my bank and open a new checking account with the property address as the name printed on the checks. You make your payments from this account. With this name printed on the checks and the account number written as usual in the description space, I’ve never had one questioned.
Again, if they accept a number of payments, it’s almost impossible for them to come back at a later date and “all of a sudden”, cry that your money is no good. Remember that on an approved assumption, the bank is basically just trying to pick your pocket for an “Assumption Fee” raising their yield on the note, (they’re as crooked as most insurance companies).
I don’t ask the bank anything before assuming because they won’t know unless you go down there and snitch yourself out to them.
Just do your deal and the bank will continue to get the return they originally agreed to take from the current borrowers. They don’t need any more. Just go do it.
Regards, Mike M.
Mike/Joe, I’ve read your comments back and forth and I’m curious myself. This whole thing is very new to me but I’ve had a couple of those opportunities come my way and I really didn’t know how to go about taking over a property from someone who just wanted to get out of foreclosure; without any major issues. Can either of you assist me with the steps from an investors view if I should come across another great opportunity; I’d really appreciate it.
Thanks,
Jessie!