L/O Question - Posted by Jim (Alaska)

Posted by WilliamGA on March 06, 2000 at 08:38:34:


Sure you can L/O a house that has a mortgage on it. That really makes no difference. You are correct that you escrow the deed to help insure that the seller will not fail to sell as agreed, but you will also want to get a performance mortgage or deed of trust against the property as added insurance. This way, if he fails to do as agreed, you can foreclose the property.

To help insure that the underlying payments will be made by the seller, you might want to have a servicing company handle the payment distribution. They can recieve the payments from your T/B, and mail a check to the underlying mortgage company and one to you for the difference. They can also send one to the seller if he actually gets anything on a monthly basis, but you are a better negotiator than that, right Jim? LOL

Good Luck!


L/O Question - Posted by Jim (Alaska)

Posted by Jim (Alaska) on March 05, 2000 at 21:24:30:

Hi folks,

I am working on a L/O and have this question: Can a house be lease optioned if there is a bank loan still owing on it?

If so, how do you insure that you will recieve the deed? I know that you escrow the deed, but am not sure if this works with a preexisting 1st. on the house. Also, what if the owner defaults on his loan?

Thanks, Jim