Posted by lou(tn) on December 22, 2002 at 18:22:01:
JR
Basically its taking title to a property subject to existing financing. They deed you the house but the loan stays in force and in their name. You pay the mortgage but they are still responsible not you. You are only responsible to the owner for your agreement.
There will probably be a due on sale clause which basically says that the entire note can be called due if title changes hand. There are ways around this but it is still a posibility and both the buyer and seller need to be aware of this.
It takes a pretty motivated seller to try this. Not your everyday seller is willing to hand over their credit to a stranger and hope they make payments they are responsible for.