I attended a real estate investing seminar this weekend and heard that North Carolina lenders are calling in loans that are being paid through subject-to agreements.
Is this true, and are any other states doing it? The person who told me thought she’d heard SC was also moving in that direction.
Thanks!
The only way this can be done is by parking someone in the courthouse all day long and having someone look for ‘subject to’ deals.
Or they might see a change in address and a change in homeowners insurance and decide to investigate.
Where most of the Sub2s are identified is when the homeowner’s insurance reflects the name of a new insuree along with the lender. the insuree will no longer reflect the same person that took out the loan.
Keith
It was my understanding that one cannot even do a Sub2 deal in NC (legally) unless they are a broker. Maybe the legislation went a bit further than that.
Most lenders have the legal right to call in their “subject to” loans at their option, as this would be stated and seen on the original Note and Deed of Trust documents.
My questions is, why would lenders suddenly start calling in these loans? How would the lender benefit from this action? There’s no viable reasoning or logic that supports this action from what I’ve read in your post. As long as payments are being made the bank is making money. However, there’s always risks associated with these type loans regardless. My best advice would be NOT to do this type deal unless you fully understand the consequences associated with it.
There’s a ton of free information offered on this topic. “Ceveat emptor,” buyer beware.