Posted by William Bronchick on July 12, 2000 at 17:33:21:
Actually, that idea came up years ago and I am not aware of ANYONE who actually has done it. Two basic reasons:
There is no law that actually prevents the lender from calling the loan due just because the second mortgage holder got a deed in lieu of foreclosure
If you can convince the seller to do such a thing, he would be just as motivated to just GIVE YOU THE DEED!
A novel way to beat the DOS clause - Posted by osirus
Posted by osirus on July 12, 2000 at 16:37:28:
The following technique was revealed to me at my REI Club’s meeting for beating to DOS clause and I would like a critique of it.
You find a seller that is motivated enough to let you take over their payments. The seller agries to allow you to place a second “call option mortgage” on the property for at least $1000. Now you are a 2nd position lien holder with all rights therein. Next you contact the bank and tell them that you are a 2nd lien holder and will be making back payments,including any penalties, to protect your interest. Thus, if the bank calls the loan due or tries to foreclose, you would be in a strong position to stop them.
Meanwhile the seller gives you the deed.
It was called the “Friendly Foreclosure” - Posted by Soraya(SanDiego)
Posted by Soraya(SanDiego) on July 12, 2000 at 23:44:05:
It has been around for a long time.
The “Friendly Foreclosure” was a popular idea in the 70’s.
My dad bought a property this way and the lender called the loan. He had to re-finance the property very quickly. That was when the interest rates were about 17%. I think it was 1974 or 1975.
Soraya