Mike:
With the loan being older than 12/1986 it is probably not a “non qualified freely assumable” FHA loan and therefore it will be difficult to take title “Subject to” that mortgage. However I am sure you can still assume it. Have the title/ escrow company order up an “assumption” package from the lender. They do this all the time. This will provide them and you with the directions & some of the paperwork needed to accomplish this.
Mike:
If you FORMALLY assume an FHA mortgage yes you will start showing up on the account in the borrower and eventually it will report to a credit agency. As for public record the answer again is yes. Typically the deed transfer from the seller to you will contain language that says " the grantee herebys assumes and agrees to pay that certain mortgage dated XXX and recorded xxx in OR book, XX Page XX…"
Depending on the actual date of the FHA mortgage it may be feasible for you to take title “SUBJECT TO” that loan. This means that you are NOT formally assuming the debt and all liabiility that goes along with its repayment. However you agree to acknowleged the debt and to make payments on the debt without formally assuming the obligations.
Around December 1986 I believe many of the FHA loans became “qualified” type assumptions. As the years have gone by the older pre December of 1986 FHA & VA loans are becoming a rarity. Get a copy of the actual mortgage instrument and review it carefully.
Michael Morrongiello
Operations Mananger
American Note
Re: Don’t Assume take title “Subject to” the mortgage - Posted by Mike OH
Posted by Mike OH on October 04, 1999 at 19:51:40:
thanks Michael
the seller took this mortgage out in 1987 and that’s all I know. Does this put the seller in any danger? How do I explain this to the seller? If I understand you correctly, I still get the title? Where should I go to get this done? Do you have any paper work?
thanks again for your help