I have a foreclosure deal I’m working on. I am going to pay to make the mortgage current (about $3500). In exchange, the owner is going to Quit Claim the deed over to me and I’ll basically assume his loan. My question is if I record the deed, will the bank be notified and, if so, will they exercise the due on sale clause in the mortgage?? If they do exercise the due on sale clause, what are my options?? Anything I can do to protect myself up front??
Does anyone have any advice on working a foreclosure this way, as this is my first one. Thanks in advance…
I quit claim deed is the worst deed you can get. You may have a hard time getting title insurance when you need it later when you resell the property. Try to get a special warranty deed or a deed without warranty at least.
Recording of the deed will not automatically notify the bank. Stuff like insurance company changes, change of address will raise a flag. I have gotten the owners to hire me as their management company and there are other ways as well. Many courses teach about trusts for instance.
If you do get the loan called you can possibly assume it after the fact, sell it outright, refinance, or file BK. You may want to use a LLC or partnership or other vehicle in case of the latter possibility.