Hi all,
I recently did a SUB2 in which it was my property that was sold to an investor.
My ordeal now is I am trying to refi another property of mine. One of the questions I have to answer is real estate owned.
The bank has ran my credit and sees a mortgage under my name (title not in my name). So if I put I don’t have any RE owned, then what? I don’t want to tell them I did a Sub2 on a property I had.
The bank also knows that I was late 3 months in a row. This is easy to explain ONLY if I didn’t do a Sub2. BUt how do I explain this?
Why would 3 late payments be easy to explain if you 'didn’t do a Sub2? Does that mean YOU were late with the payments. If so, you’re screwed six ways from Sunday, until you’ve got at least 12 on-time payments under your belt on ALL of your loans (even the sub2 loan).
Meantime to prove a sale (sub2 or whatever) you need a HUD1 settlement statement that describes and confirms the financial details of that sale.
Tell the bank you sold the property and show them the HUD1 Statement.
Meantime, the late payments are a problem regardless of your excuse/reason. “YOU’RE” NOT PAYING THE FRIGGIN LOAN ON TIME. :anon
I won’t ask if you paid late, or your end/user/investor paid late. It doesn’t make a lot of difference.
In the future you need to escrow some payment money, to cover any possibility that the payments could risk being paid late again. I have our note servicing company debit the escrow account the same day each month, regardless if the buyer has paid me yet, or not. This way, as the payments come in, the servicer deposits the payment back into escrow, and its ready for next month’s debit.
The bank may make a portfolio loan to you, even with late payments, but that means finding a smaller bank that doesn’t sell everything to fannie mae.
Next, set up a note servicing account with notecollection.com to accept and make payments on everyone’s behalf. It’s gonna cost a few bucks, but they can legitimize the sub2 deal for you, if not provide tax information at the end of the year to you and your end/user/investor buyer.
Meantime, the bank could care less that you sold your house sub2. They just need to know you sold the house, and want proof (sometimes). That is, unless you sold the house sub2 with the same bank’s loan in place that you’re trying to borrow from. That would be cute. … uh huh? nuh uh? :evil