Financing in 78957>Question Details

carolynwisdom, Home Buyer in Smithville, TX

what are the consuequense if we default on a deed o trust home loan that orig. mortgage was assumed by my mortgagor and then sold to me with a second

Asked by carolynwisdom, Smithville, TX Wed May 15, 2013

we purchased a home from the lending group out of Austin they financed. We found out later that they assumed the orig. loan and sold it to us with a second for their profit. We have a balloon note due 8/2013

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You should consult an attorney. It depends on how the loan was set up. I just refinanced a client out of such a loan. The initial loan was still in the original buyer's name and that is customary in these circumstances. While the mortgage did not report my clients made payments to a 3rd party company that ensured the payments reached the bank and also kept a record of the transactions. This protected both parties. Their loan did not have a balloon attached to the note.

Is it possible for you to refinance out of the note? Is that something you even want to do? Again, to see what your rights are you should consult an attorney. Hopefully you did so initially when you purchased the home as I advise all of my clients to do so when considering an owner financed purchase option.

Hope this helps.

Depending on when the lease is over it may make sense to wait until you are closer to the end of that lease. You could also have a talk with your tenant to see if they would be willing to move early if a new buyer wanted to take possession for themselves. Maybe offering them some money would do the trick.

While nobody can predict the future I think we are at the beginning of another cycle that should go on for years to come. Again, that is just an opinion and everybody has one. Texas is a state where many people want to live and that will keep housing prices going up over the years unless something happens to change that mentality.

Hope this helps.

_____________________________________________________
Don Groff | REALTOR® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 | listings@dongroff.com
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
Web Reference: http://www.AustinListed.com
0 votes Thank Flag Link Thu May 16, 2013
We cannot offer legal advice at this forum. I suggest you get with a good real estate attorney. My first bet though would be that the "lending group out of Austin" probably "assumed" a nonassumable loan without the original borrower being released of liability for the loan.

Conventional loans aren't assumable. FHA loans are assumable to qualifying owner-occupants. Clearly your "lending group" wasn't owner-occupying, unless they lied to the lender. VA loans are assumable with qualifying by occupants or investors.

So they "assumed" in some way. And then you have a 2nd to them, but does the 1st lien holder even know about you?

This is a big mess. I feel most sorry for the original borrower because if he let his nonassumable loan be assumed, that loan is still in his name.

Barbara Coker
Licensed Mortgage Loan Officer
NMLS#228545
100% Home Loans All Over Texas
0 votes Thank Flag Link Thu May 16, 2013
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