Posted by rm on April 18, 2003 at 12:40:46:
If his banker is such an expert, perhaps he can help the seller get out from under the property.
Obviously, you need to say it nicer than I did.
Subject to - seller talks to their banker! - Posted by Mark
Posted by Mark on April 17, 2003 at 18:00:33:
Had a subject to in the works however seller called their banker and of course he says his loans are not assumable and he’s never heard of this before…How do you explain to the seller not to talk to the bank, that what I’m doing really works, not underhanded etc…?
Re: Subject to - seller talks to their banker! - Posted by Dave T
Posted by Dave T on April 19, 2003 at 23:35:33:
If you need ammunition to convince the seller that “Subject To” is legal, just show him lines 203 and 503 of the HUD-1.
Subject To must be not only legal, but, such a common practice that the federal government even includes it on their HUD-1.
Re: Subject to - seller talks to their banker! - Posted by John Katitus
Posted by John Katitus on April 19, 2003 at 02:07:37:
Also have a document signed by the seller and notarized saying that he understands that his loan is not being paid off or assumed. A motivated seller will be happy to sign - it sounds like this one is a losing battle.
Re: Subject to - seller talks to their banker! - Posted by B.L.Renfrow
Posted by B.L.Renfrow on April 18, 2003 at 20:14:54:
It all really depends upon just how motivated the seller really is. The ones who are truly motivated aren’t going to be calling their banker to ask if it’s OK.
That being said, I once did a subject-to deal…WITH a banker…whose bank held the loan! Needless to say, she didn’t call up the loan department and tell them the story!
Brian (NY)
Re: Subject to - seller talks to their banker! - Posted by Tom ( MI)
Posted by Tom ( MI) on April 17, 2003 at 23:25:26:
Did you tell the seller you were going to assume his loan? Make it perfectly clear that you are not assuming the loan but making paymetns on the loan. The seller is still liable for the loan.
Re: Subject to - seller talks to their banker! - Posted by J. Christopher
Posted by J. Christopher on April 17, 2003 at 20:45:40:
Hi Mark –
First, let me say that there is absolutely nothing underhanded or wrong about what you’re doing. People buy property using the existing financing every day and in every part of this country.
With that said, explain to the Seller that you are NOT assuming the loan. You are taking title to the property and keeping the existing financing in place. The reason: if you were to actually assume the loan, you’d be required to go through the entire loan approval process as if it were a new loan. Who wants to do that??
Additionally, you’d be subject to a higher interest rate because you would not be able to take advantage of an “owner-occupied” rate. Therefore, its more financially beneficial to you to “use” the sellers great intereste rate.
If this Seller is truly motivated, he will agree to this.
Also, you should have somewhere in your paperwork that if the Lender does find out that title has transferred (the only they would is if the Seller would call them again!!), and the Lender calls the loan due, you are no longer responsible for making the payments because the Seller has breached the contract.
Hope this helps,
J. Christopher