Does anyone know for a fact that performance mortgages are illegal in Texas? If they are legal, and they are being used by investors in Texas, then how are they removed once the property is sold?
Thanking you for all replies in advance.
Arcus :roll:
If it is what I think it is then they are not illegal. As I understand it the payment on the loan is adjusted according to the income of the property. I have heard that some REO sellers of vacant properties doing some loans like this for the first several years until the new owner can better afford the payments. If I assumption is not correct will you please explain the definition. Some members way want to know. When you pay off a mortgage you will get a release which will release all covenants and agreements in the deed of trust.
Happy Hollidays and Thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
The following is a quote from the man that thought me everything I need to know about Lease Purchase deals.
"This issue is about the homeowner who simply changes his mind and refuses to sell to you when you try and exercise your option to purchase. What happens in this scenario? The Memorandum of Option does nothing in this regard. To prevent this from happening requires you to record a different document called a Performance Mortgage. This is a mortgage given to secure performance of an obligation other than a promisory note. That obligation is not financial on the homeowner’s part. It is, rather, that the homeowner has agreed to certain terms with you, including allowing you to purchase the property at any time within the time frame of your agreement. Should the homeowner attempt to back out of the deal, this recorded Performance Mortgage allows you to begin foreclosure proceedings against the homeowner to force the sale. "
These are not illigal in Texas Arcus, investors use them here all the time.
Once the property is sold you simply go down to the county office where it’s recorded with the proper documents showing that you no longer have interest and they will cancel it.
Cruz
Any type of agreement can be recorded to place a cloud on the title to a piece of real property. When one of my partnerships split I did not like the potential out come so I recorded a letter that stated that I had an interst in the property and buyer beware that I would sue if these properties were sold without me being paid. It worked.
Contract for deed agreemants that are recorded must be released before the title is transfered to a third party, either by a release by the parties or court order, or proper abandonment procedures (?) I was the buyer one a c/d once and the seller wanted me to sign a release and I did not. Held him up for months and I could have stopped the sale but I did not.
Appreciate your above post, thanks for teaching an old dog some new stuff.
I would think that releases would be in order too with the performance mortgage instrument. It must be a mortgage state document. I have only done business in Texas and never seen the term but I do not pretend to know it all.
Happy Hollidays and Thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
I appreciate the great replies to my question about performance mortgages. Sometimes I get caught up in the details and forget the big picture is to get properties! Once again, thanks for the great replies and the great website.