Sub 2, loan modifiication, possible snafu

bought a house subject 2. got a payoff, closed with an atty and contacted the bank at the closing table. There was 7-8k in arrears, but the house was NOT in foreclosure.

I contacted the bank a few days after closing (got my letter of auth. so i am allowed to talk to the bank) to get some #'s and find when the next mtg was due. They told me the loan was modified and the only payment due was the bill coming for November 1st. So i say to myself OK, thats good, i dont have to pay arrears but how will this affect the final payoff when i sell. Oh well, lets get it rehabbed and back on the market.

Now I get a letter where they want the mortgagee to sign some documents, notarized. Obviously I cant get this now. 1, he is probably back in Nigeria. 2. we had a falling out when he kept disputing what I paid and how much I owed him AFTER closing. Days after. I gave him some money for taxes he double paid, but told him where to go after the next dispute.

So do i just ignore it? Do i tll them hes in Nigeria? do i tell them he sold it? do i tell them the house is in pieces and being rehabbed? (its not that bad but I can imbelish <— sp?) DO i tell them its rented, nobodys living there etc?

The problem is I had the money budgeted to pay the arrears, but since that seemed no longer neccessary, it was allocated to other departments… LOL. SO now i cant pay the arrears


You need to find out if you are now the note holder on the loan or just authorized to make payments for the original note holder. If you are now the note holder, anything the bank wants from him is not your problem. you and the bank deal directly.

You say you “closed”. Does that mean you now appear on title? If you are on the title with an assumed mortgage, let the bank deal with the original mortgagee. If he is still on title and you are only authorized to make his payments its going to get sticky. Best to talk to your attorney who closed the deal to find out what your rights are.

It sounds like they modified the loan to reflect the extra $7000 balance (ask the bank for a payoff) but it also sounds like it is still in his name and he quit claimed the deed to you. When you sell the property and pay off the loan (probably with the extra $7K tacked on to the loan balance) the deed would normally go to him but would revert to you because of the quit claim.

On one side, you hold all the cards because nothing is in your name. If you quit making payments,it doesn’t go on your record because you aren’t on the loan.

On the other side, you are basically just a property manager at this point because everything is still in his name.

Yeah, you need to talk to the attorney.


we closed on the property through an attorney. I received a normal title (warranty deed?) not just a quit claim. I even have title insurance. The property is now titled to our LLC and it even shows up on public records now.

The mortgage is still in the original homeowners name. Due to the lateness and our state being non-judicial, they can foreclose any time they want with just 4 weeks notice.

I REALLY REALLY do not want to refi the loan. We are about 2-3 weeks away from having the house in tip top shape and on the market.

I need to call them ASAP. Every time I call, they ask me if he lives in the house. SHould I just tell them no? And tell them hes in Nigeria (thats where hes from) and the house is a wreck, we are fixing it and trying to sell it?

I would see how long it will be before the bank takes back the property if you don’t pay and just HURRY UP and get the rehab done ASAP and get it sold.

They are asking you if he lives in the house because if he does, they have to evict him which can take months. If he doesn’t, they can foreclose quickly.