Say I purchased a home having used seller financing with a previous underlying mortgage and everything is going smooth for 4 or 5 months but suddenly the person the buyers making monthly payments to gets in some financial problems and stops forwarding all mortgage payments (ex sellers payments to bank 1,500 - buyers payment to seller 1600 but seller stops) and then a lis penden is filed eventually starting the motions of foreclosure . What right’s would the buyer have? What could be done at this point? thanks!
Are you saying the seller is pocketing the payment and not paying the mortgage? What does your contract say with regard to payments?
The lender has every right to foreclose if it isn’t getting paid. It can also call the loan under the DOSC since the seller sold the property and the mortgage wasn’t paid off.
You could talk to the bank and see if they will allow you to assume the underlying mortgage. Expect to qualify and pay a fee.
In order to qualify would the criteria be the same as if applying for a new loan? or would it be more relaxed?
I would expect it to be somewhat relaxed.
Hi,
Always have a title or escrow agency do the servicing of the agreement!
That way your payments are going to a secure agent as your designated trustee and the monthly payments are being paid to the lender!
Good luck,
GR
You can stand in line and file a lien but chances of collecting on a foreclosure is rare in this market. You can try ad file a claim using Equitable Interest, but if the lease agreement and purchase option is written correctly you will have a hard time winning the suite. Smart investors make the rental seperate from the purchase option to keep this from happening.
I would see about getting a power of attorney from the owner so you can talk to the bank and see what can be done,
yrush,
The situation here is a seller financed sale, most likely a contract for deed since there is an underlying mortgage. This is not a lease option deal.
How does your response change?