For all of you doing lease/options, lease/purchases, or sub to’s, do any of you acquiring property this way (where your sellers have mortgages) explain to the sellers what could happen and what would you do if it does happen. Do you have a contingency plan? Also if you are selling this way and have mortgages on your properties - what is your contingency plan there should the note be called? I understand that this happens infrequently, but it is one of the risks. I think we all realize this but what plans do you keep in place for the magic moment?
I believe I have recognized that, my question is if you are buying from someone - do you inform the seller of the risk that the Loan may be called? and, wether you do or not do you have a contingency plan in case it is called due?
Also the reverse - when you are selling - do you have a contingency plan in place in case your loan is called due?
It is only fair to mention this clause and the risk involved. It is our duty to let the seller know what can happen. Being honest and upfront can save from a lawsuit later. Having a plan if this comes up is only smart business but I don’t think we need to worry too much about this. We just need to be aware and know what to do. Then move on. This conversation is a good reminder. Thanks.
When making a deal with the Seller, You want them to contact the mortgage company to inform them that the house is turning into a rental. That way the mortgage company isn’t surprised on the change of address etc. This will protect the DOS from being affected! The owner still owns the house. Everyone is happy during the transaction with ALL parties!!!
thanks for clearing up but i still would like to know if the transfer of the deed lets the mortgage co. know FOR SURE that the owner no longer owns the property, therefore telling them it will be rented out is not really neccesary