I’m a wannabe investor. I have read alot of articales and read a few how to buy pre4closure books. What I want to do is forcus on pre4closures using “subject to” then find a buyer to sale it to however, there are a few things I am not grasping. The main one is this: I find a good deal and take the loan “subject to”. I have owner deed me the property right? Do I use a quick claim deed, grant deed, warranty deed or what is the best way for me to go. I pay the amount that will satisfy geting the loan out of 4closure, and sale it to an investor on my buyer list. So, is that about it? I still puzzled about how to obtain deed from seller. Do need to to Office Max for forms? Am I missing anything else in my process to obtain and sale a pre4closures house?
Just remember that when the owner deeds you the property it is a violation of the DOSC. Some will tell you to bury your head in the sand and not to worry about the DOSC. I find that careless and potentially dangerous.
As interest rates continue to rise, and when times get rough and mortgages are tight, what’s a good way for banks to raise money and make their stock and their portfolio as salable as possible? Just call in as many low-return and non-perfoming notes as possible and get them off their books. How many “subject to’s”, and/or fraudulent transfers could you find in any bank’s overall portfolio these days? And what about when property values are falling and interest rates and loan parameters are climbing?
This is not a prediction of doom, only a heads up as to what can happen. It happened before in the 1980’s and I personally never trust banks so be careful out there.
Thanks Wiz, for the infomation
I’ve seen DOSC mentioned in several places, but never an explanation of the acronym. Can anybody enlighten me?
A Due on sale clause is a clause in almost all mortgage loans that enables the bank to call the loan due if they learn of a transfer of deed, such as in a “subject to” transaction.
The lender has the right to call the loan due when title transfers, but they rarely do. It is a non issue 99.9% of the time. They WILL try to scare the insides out of you with the threats to call it due, but it is very rare they follow it all the way through, with very few exceptions, such as a ton of equity. A minor raise in interest rates won’t do it, no matter what the doomsayers say. They have enough foreclosures on the books, they certainly dont want to create some when not necessary.