Urgent - Assignment with mortgage and bank question

I have an urgent question that I need figured out within 24-48 hours if possible so thanks in advance.

I have a property currently under contract from a bank that has just entered attorney review. I got it for $210,000 and have someone who wants to pay $235,000 for the property (so $25,000 assignment fee). I was thinking about maybe doing a double closing but the bank is making me use their title company (I’m assuming they won’t allow double closing, is that a correct assumption?). So instead I was thinking maybe I can get an assignment instead but he needs to get financing on the loan amount so he would have to over finance the property to get the $235,000 instead of $210,000 so he can also pay me an assignment fee from the loan.

First of all I would have to get the bank to agree to remove the clause saying that “assignments are not allowed” but lets say that the bank agrees to that, then…

Is it possible for him to get the assignment fee from the mortgage in this situation (by overfinancing the property) or will the bank not allow it because they see me as the middle man?

Does it have to be a cash offer only?

Is there anything that can be done in this situation to get the property sold quickly instead of buying and holding it?

Wow, tough spot dude.

Based on my understanding of the issue, the bank wants to use their closing agent to make sure it’s your money and that title vests in you. The bank doesn’t mind cutting their losses but will not stand idle while a profit is made on their loss.

If I were in your shoes I would look for a hard money lender to close with the bank then close with your buyer. However that presents a title seasoning issue should the new buyer require institutional financing…??

After seeing my reply in print I am leaning towards your first approach, ask the bank to allow an assignment of your current contract. You may have to cut them in on the extra bread but in this instance I think it would be wise.

Sorry I couldn’t be of more assistance.

I’d have to agree with Mellon. Tough spot, since the bank requires their closing agents and have disallowed any assignments. You can ask for them to allow an assignment, maybe for an additional $10k and sacrifice some of the money, but the huge danger here is if the bank gets a sniff that there is someone else interested in buying the property for more money, they will disallow the assignment, hope you don’t close, then try to sell for more - since obviously YOU found someone who paid more.

So if I could, I’d try to find some kind of a bridge financing to close the deal myself, then do another close - maybe not simultaneous since the bank’s closing people is doing it. Your $25k profit will be cut into by the second close, and whatever the carrying cost would be on the closing money, so there might not be enough profit in the deal to do this.

Another option is if your buyer has the chops to put money up - you can bring him in as a partner - instead of a full assignment - a bank is more likely for to accept bringing in an additional person on the same deal, then on an assignment where they are losng part of the profit to a middle person. Then after the close, he buys you out for your Quit Claim off the deed.

This is a perfect example of an investor needing to know their exit strategy for everytime they go to buy a property. You need to know what potential problems maybe before you offer, so you are not scrambling come deadline trying to keep a tough deal together. If you are looking to wholesale something, you need to know you are offering on something that can be wholesaled.

Good luck