What if Seller defaults on his Mortgage? - Posted by Fred (NC)

Posted by John Merchant on October 31, 2008 at 13:48:02:

There are Note Servicing Companies, who, for a set fee, will take your payment and then immediately make the distributions from it to those people you’ve previously designated for payment.

In Puyallup WA there’s a co. we locals use a lot: Evergreen Note Servicing Co.

I think that ENS Co probably would do this for anybody in any state and they’re worth talking to.

A big advantage in using a note servicing co. like this is their normally very accurate record keeping which is so above-reproach that it makes good court evidence that usually settles any disputes over who paid what, when without further argument.

What if Seller defaults on his Mortgage? - Posted by Fred (NC)

Posted by Fred (NC) on October 27, 2008 at 19:59:48:

Greetings all! Quick question. I’m interested in buying on a lease option but cannot remember what could happen if the seller quits paying on his underlying financing? I realize I need to record the option and lease (both notarized), but all this does is “cloud title”…what type of protection do I really have that the house can’t disappear from under my feet?

Thanks in advance,
Fred (NC)

You could use an intermediary - Posted by Rich-CA

Posted by Rich-CA on October 27, 2008 at 23:57:25:

to handle the collection and disbursement of funds. I have heard of a couple that will take the payments and distribute them to the appropriate recipients. Off the top of my head I cannot remember the names of any of the companies, but one was mentioned in an RE text I was reading a week or so ago. You might try a Title company and see if they will set up a payment escrow to handle the ongoing distribution.