Hello, Good day to all, my question is concerning the documents that are essential to subject to financing transactions. I have read that you need to obtain "power of attorney"and a document called “Authorization to Release Information Form.” My first question is the “Authorization to Release Information Form” part of the process of obtaining “power of attorney” from a seller? The second question is the “Authorization to Release Information Form” and gaining “power of attorney” completely different transactions with respect to subject to financing deals? Thanks to all that review this post. All answers provided to these inquiries are gladly appreciated.
The “Authorization to Release Information” form is signed by the seller giving you written authorization to review any an all bank accounts listed on the form. Obviously you’ll want to make sure the mortgage account number is listed on the form (and second or third if need be).
In my short time investing I’ve never used a “Power of Attorney” form. To be completely honest I’m not real sure what it’s used for. My attorney told me “don’t worry about that form, it won’t help.” Not sure if he was covering his A$$ or mine.
Hope this helped. Good Luck.
Thanks for the response Goldthread. I have some other questions. My first question is do you obtain the “Authorization to Release Information” form from your attorney or do you obtain these forms from a legal website or company?
In your investing experiences with Subject to the existing financing transactions, do you feel it is necessary to create a trust with the seller making the L.L.C. or corporation the beneficiary?
What kind of arrangements do you make with the seller to make him/her at ease that his mortgage payments will be paid on time?
I’ll give the typical phrase…I’m not a lawyer and this isn’t legal advise. You should contact your lawyer with any questions…
I just wrote my own “Authorization to Release Information” form. Throw it in Google and I’m sure you’ll find plenty of examples. It’s really pretty typical, not much verbage…“I (We) hereby authorize you to release information regarding the above referenced loan to…” When it’s signed just show the bank and tell them you’re helping Joe Seller with his finances/manage his payments. I’ve found I get a ton of questions from the bank if I say I’m buying it on a L/O.
I really have no experience with trusts and honestly don’t know enough about them to comment but take a look at a few of the other posts on this site…you’ll get your fill.
Making the seller feel at ease isn’t too hard. Offer setting up a separate account that the mortagage payment can be withdrawn from everymonth. Make sure he understands that it’s in your best interest to find a responsible tenant that will pay you on time and cash you out down the road. Therefore, it’s also in his best interest…I actually had a seller find me tenant!
Thanks for the feedback Goldthread. I appreciate all of the information provided. Good luck with all your investments.