Taking title subject to.. - Posted by joey

Posted by dutch on April 21, 2006 at 23:22:18:

Well, if you read the mortgage, transfering ANY interest, even partial, triggers the DOS. So if the seller remains as a beny, but not 100%, it does violate the DOS. But then again, who’s looking? Therefore, I choose not to have the seller have ANY part of my trust, I want him/her gone forever. No difference in my liablity as to the DOS, so why bother.


Taking title subject to… - Posted by joey

Posted by joey on April 10, 2006 at 16:23:17:

Hi, my question is this: I need to take title, not equitable title, but I need my name on a title to a property I am picking up “subject to”. It is the scenario where the current owner has gotten remarried and now they have two houses and can’t afford both and are willing to give it to me for what they owe, as long as I make payments. I need to rehab the house and put in about 20k, in six months when I am done I would like to refi and cash out. I need title in my name in order to do so, what is the best approach?? Thank you… Joey, Maine

Re: Taking title subject to… - Posted by Natalie-VA

Posted by Natalie-VA on April 17, 2006 at 11:32:33:


If you’re new at this, I would suggest that you call a local settlement agent or attorney and do a formal closing on this house. If you take any shorcuts without knowing what you’re doing, you could end up with a worthless deed or clouded title or any other number of issues.


Probably OK to take title subject to… - Posted by John Merchant

Posted by John Merchant on April 11, 2006 at 23:47:25:

Actually, probably 99% today of all properties sold “sub-to” are not foreclosed on in these days of comparitively low interest and fierce competition by the banks to put their money to work.

Even though the lender’s acceleration clause (or DOS clause) clearly gives them the right to do so, as long as their payments are kept up they just aren’t motivated to change things.

So if it’s enough of a bargain, you’ll probably be OK if you do it and odds are the bank will not foreclose on it as long as you make those payments on time.

Like River C says, they could do so, and you’d better just be ready for it if it happens and be prepared to hie yourself down to your own bank and refi that RE.

By the way,in lots of private loans, there is NO DOS clause so always read that mortgage before you do anything binding…I rarely put it in a carryback loan when I sell a property as it serves my purposes very well to help the buyer sell if he gets in trouble and is unable to pay me.

Re: Taking title subject to… - Posted by River City

Posted by River City on April 11, 2006 at 08:35:57:

Be careful changing the names on a title when there is a loan against it. Unless the loan documents indicate that the loan is assumable, the lender may call the loan due and payable in full when they see the change in title. Even then, there are not any non-qualifying assumables out there that I know of. So, one would have to qualify with the lender before changing names on title.

Re: Taking title subject to… - Posted by dutch

Posted by dutch on April 10, 2006 at 18:51:11:

Well, it really is as simple has having the owner deed the property to you. Now you own it, and you’re on title.

There are some other things involved in taking sub2, and there are some legal risks. I don’t recommend anyone do this until they fully understand the process and the risks. I suggest you buy Bronchick’s course on taking sub2 and follow all his steps.

I also don’t recommend that you do business in your own name. that said, there are times when you MUST put your name on the deed, like to refi. But once the refi is done, QC it out to a trust.

Good luck.


Re: Taking title subject to… - Posted by colvegas

Posted by colvegas on April 21, 2006 at 16:40:05:

Dutch had some good suggestions on his post and you need to understand those risks using sub2 investing and as to the DOS in most cases lenders will not call it if payments are on time but with interest rates rising and/or if you miss a payment or the insurance is changed the lender may see that red flag and trigger that DOS.
Dutch just so you know you actually vest title into the trust to your designated trustee not Quit claim but I understand your thought there.
A neater way to do a sub2 is to have the seller vest his title to his designated trustee and then the seller assigns your company or you beneficial interest in the trust which btw is a silent transfer. YOu are conforming to the Garn St Germain Act of 1982 under section 8a due to no transfer of occupancy or ownership took place since the seller remains A beneficiary in the subject trust. No lender can call the loan due because you followed the law in that regard…
Another nice feature is as Dutch suggested in not doing business in your own name is having your beneficial interest as a corp or LLC or whatever you actually give yourself very good asset protection with combining both entities ( trust + corp).
Either way good luck and if I can help further please feel free to contact me at 702-400-7632…

Re: Taking title subject to… - Posted by Craig

Posted by Craig on June 10, 2006 at 18:05:52:

Alittle off topic here but. In this scenario if you bought a property at a sheriff sale wouldn’t the mortgage company do a DOS and force a refi ?