Hello to all, I have questions about the authorization to release information form and the subject to transactions. What are the primary functions of this form? Which party other than the seller, is presented with this form? Does this form provide you with power of attorney? What information can one expect to view on this form? Thanks for the responses.
Its just an authorization from the mortgagor…the seller, that you can get information on their loan from the bank. Banks will either want the authorization or the power of attorney hence getting them both signed. If you want to verify the loan amount and the terms on that you need to get one signed to communicate with the lender. You will also need one signed if your looking to do a short sale.
Thanks for the respone Arie. I think I understand the purpose of the forms. If you as the investor request information concerning the seller’s loan balance, you obtain either a authorization to release information form or power of attorney. The seller signs the paperwork. You present the paperwork to the lender or owner of the note in order to obtain loan balance/payment information. I have a question about this process. Would the presenting either the authorization to release information form or paperwork granting you power of attorney raise concerns with the lender/note owner that the seller is experiencing difficulty paying his note? I don’t want to make a misinformed conclusion, but if these concerns are raised, lead to the deal collapsing and the lender proceeding with evoking the DOSC or foreclosure proceedings? I guess if the lender proceeds to commence foreclosure or evoke the DOSC, you can ask the lender/note owner to assume the note. If there any other solutions to the questions I raised, I will appreciate the feedback.
Well… it doesn’t matter if the lender suspects that their having trouble. They can only invoke the DOSC if they know title is transfered and they can only forclose if they are behind on payments X number of months if the DOSC is not violated.
I doubt the bank people will care… just fax the authorization in… it may take a few days to get in the system. Just tell the bank that you may help them out with their house… they may decide to sell or something… tell them your an associate of the family or whatnot… and that you want to verify the terms of the mortgage etc.
Also… when you verify the mortgage… make sure to check if the loan has been modified in anyway… and if it has… find out the terms of it. With some sellers… they may have fallen behind on payments a few years ago… and then the lender may have put those payments onto the back of the loan… and then they may have sold it to another institution.
So… they may tell you the balance is 300k… but when you get the payoff letter it may say 320k because of the payments tagged onto the end. Good Luck.
Arie, I really appreciate the information.
I understand that the bank will inform you if the loan has been modified in any manner. Are there any other companies or institutions (other than the lender’s bank) that can provide you with information in regards to seller’s loan status? Have you ever experienced the lender’s bank not releasing complete information about a seller’s loan even when you submitted the authorization to release information form?
I am not aware of any other org. besides the lender that would know about the status except the collection agency for the bank.
You can also verify the status at the sellers house by calling the 800# on their loan coupon. You just need to dial in the loan # and the last four digits of their SSN. But I would still personally verify it with a bank employee.
I personally have not had that happen to me… but it’s a good thing to look into so there aren’t any surprises when you get the payoff. These motivated sellers aren’t always completely forthright. I would also certainly find out if there are any credit lines on the property as to not eat into the equity you think your getting.
Arie, thank you for all the information you have submitted. In regards to investigating if there are credit lines on the property, would it be prudent to investigate these credit lines by contacting one credit bureau or all three credit bureaus? Or can a title company provide this service? Thanks for the feedback.
Your welcome. Your title company should find out about it in their title search. I would also ask the bank as well.