Subject-to deals are happening more and more, but the ones taking over the notes are like Cathy mentioned "investors". Usually this is because they don't have a fiduciary to the seller so if the bank did decide to call into effect the "due on sale" clause; the investor will usually point out to the seller that they were fore warned and it's just unfortunate. Also investors know their exit strategy and holding period and can take the risk by not closing at a title company which would have given them a title policy insuring clear title. Too much risk is out there for a single residential buyer that is simply looking for a home.
Of course, they are still being done. Usually if you can find a distressed home owner that is far behind, if you contact the bank usually the "assumption" department, you may find that if you have the full amount of cash to bring them current; they may just allow it. But that is VERY rare!!
You should probably align yourself with a Realtor that is experienced and knowledgeable in both the "inside the box, class-room taught" traditional method of real estate AND the "outside the box, creative and profitable" non-traditional methods of real estate if you truly want to see the pros and cons of something like what you are looking into.
Some investors offer Wrap around loans and are doable if you (1) go through an attorney and (2) work in cooperation with the bank. Some investors get into this type of bail out in order to help distressed homeowners. Their objective is to release the owner from making the morgage payment and the new owner continues to market the house to a new home owner hoping to sell it at a profit. The investor tries to work out a negotiated rate with the bank. However, if you ask me, the whole thing is a scam and many realtors won't even deal with it, it's part of the aftermath of giving loans to unqualified buyers (subprime market).
Your comment didn't note if it the purchase is for you or for an investment. If it is for yourself then you really need to look into getting your own loan and start fresh. It also seems to me that with today's low market rates that you could find a good loan product. If you are having trouble getting qualified then that is a whole other issue. If you would like to visit with me about finding a good home/good deal and need help with financing I can certainly help you.
RE/MAX Alamo Realty
Much like Ted mentioned, the "due on sale" clause is going to be a problem. These days you just can't transfer the responsibility from one party to another. Even if the loan is assumable, you would still need to qualify for the loan.
Basically the answer to your question is "don't."
If you're unable to be qualified for a loan and that's why you're looking at this as a viable option, the problem is that you would still need to qualify with the lender that holds the current loan. If you can't qualify with them, you can't just take over the loan payments.
I suggest you speak with a qualified local lender about getting pre-approval and if they can't, most reputable lenders will then suggest some steps you take that can help get you to a point where they'd be able to pre-approve you.
Hope that helps.
Matt Stigliano, RealtorÂ®
"Your all access pass to San Antonio real estate."
If it is assumable, I would recommend going through the proper channels in transferring the loan into your name.
I hope this helps!