Home Buying in San Antonio>Question Details

Sommer, Home Buyer in San Antonio, TX

True or False? You can take over mortgage payments for someone in pre-foreclosure wihtout having to qualify

Asked by Sommer, San Antonio, TX Mon Oct 27, 2008

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6
Sommer
Only if it is assumable..and you'll have to qualify.
I recommend that you establish a good relationship with a REaltor to help you put together a plan to buy a home...not a plot to steal one.

If you like I'd be happy to refer you to a top Realtor...but only if you are serious.
0 votes Thank Flag Link Mon Oct 27, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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False. The note becomes due upon transfer.
However, I have seen real estate investors do it and get away with it because the bank is mostly concerned with getting payments.
You will have to bring the note current though.
AND.... I highly recommend that you employ a real estate attorney.
Good luck!!
0 votes Thank Flag Link Mon Oct 27, 2008
Sommer,

Most of the time this is false. In most loans there is a "due on sale" clause that causes the entire loan to become due if ownership changes. Some people think there is a way around this. Lots of people used to tell you if the payments continue to be made it was no big deal and the bank would never call the loan. This situation has changed and the banks and lenders are much more crafty in determining if ownership has indeed changed, although typically it is not all that hard. Be very careful with these types of transactions....even the best crafted transaction can easily go wrong. Make sure they transfer through a title company, make sure to involve your realtor. Make sure any deposits you make go through a title company, and that any payments you make go directly to the lender and not some kind of 3rd party.

Otherwise, you may be back on this site in a year asking us how to resolve your problems.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Mon Oct 27, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
False.

The laws and regulations are very specific with regard to "assuming" a loan. Prior to 1987, "Non-Qualifying" assumables were very common. But for obvious reasons, the VA, and FHA stopped writing new loans with the Non-Qualifying clause in them. When I first got into the Real Estate Sales business in 1994, there were a lot of these still available, and I did quite a few deals this way. Then, as those dissappeared as people refinanced and got better interest rates, and all loans after 1987 were assumable only if full qualifying terms were met, we began focusing on Contract for Deeds, and other devices to create "assumable" loans.
As the laws tightened on Contract For Deeds, we started doing Lease Purchases, and "Subject-to's" and all kinds of end-runs to keep the "non-qualifying" market open. The Texas legislature followed close behind the creative financing and have essentially closed most loop-holes at this point.

That is the long answer to a short question. Let me say that virtually all loans since 1987 contain a "DUE ON SALE" clause in their mortgage paperwork, stipulating that they have the right to DEMAND full payment of the loan if you sell the home... and in Texas, as stated before, that would include Contract For Deeds, Lease Purchase, and any other mechanism designed to convey title of a property. You even have to be very careful on Lease-Option contracts. The key question is: Is there some kind of ownership being conveyed? If Yes, then it is a legal sale and must be recorded, and would be subject to the Due on Sale demand of the underlying loan.

Before becoming invloved with any such transaction, I highly recommend that you employ an attorney, or an exceptional Realtor, such as myself :-), and protect yourself from possible loss of property, lawsuits, and scams.
Web Reference: http://IsellSanAntonio.com
0 votes Thank Flag Link Mon Oct 27, 2008
most of teh time false unless the loan is assumable. there were some older fha loans that you did not have to quailify for, you would have to read the mortgage. as well you would have to bring the mortgage current to take it out of foreclosure. hope this helps. good luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Oct 27, 2008
False - You must first make sure that your mortgage is assumable. Then the potential buyer must get qualified through the mortgage company.
0 votes Thank Flag Link Mon Oct 27, 2008
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