Our house is getting ready to go into foreclosure, we've got an investment firm wanting to "buy it".

Asked by Seperated, Palm Harbor, FL Fri Jul 3, 2009

I'm not sure if this is legal, they take over payments but mortgage still in my name but we have to sign over the deed.

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Don Tepper, Agent, Burke, VA
Fri Jul 3, 2009
My answer differs somewhat from the others provided.

True, you have to be very careful. However, in some instances this strategy can work.

What the company is proposing to do is called a "Subject To." They buy your home "subject to" the existing mortgage. Your name remains on the loan. They own the house. And, yes, that's very risky to you. At some point in the future, they will sell or refinance your loan, and you'll be off the mortgage. Their argument--and it's accurate for the legitimate companies out there--is that they'll make up the back payments, help reestablish your credit by paying the mortgage on time, and at some point get your name off the mortgage. You might end up with a share of any profits, as well.

A "Subject To" is legal. However, it will violate your lender's "due on sale" clause. In your case, that's really not a problem, since your heading to foreclosure anyway. But, as a practical matter, in today's economy lenders would much rather have someone else (the investment firm) paying your mortgage than for you to remain unable to, and for the lender to have to foreclose.

To correct another answer below, this is not an option contract. Ownership WILL transfer. Under an option, an investor would have the ability to assign a purchase contract to someone else. However, in your case (assuming you have little or no equity), that wouldn't make sense.

I know reputable investors who do "Subject Tos." It's a legitimate strategy that, when executed properly and ethically, is a win-win-win for all involved. However, to repeat, it's very, very risky for you. And before you even consider it, you should explore the other options mentioned below: loan modification, short sale, examination of paperwork to detect errors when you purchased the property, and so on.

Hope that helps.
2 votes
Bibi Zanella, Agent, Clearwater, FL
Fri Jul 3, 2009
PLEASE DON"T sign over your deed. There are a lot of shady companies out there that will ask you to sign over your deed and then sell your home from under you while you're left with all the debt. Please call me for a free consultation as we specialize in listing and selling "Pre-Foreclosure" properties in this area and can help you avoid a foreclosure. We work for a reputable company and there is absolutely NO cost to you. Your lender will pay all seller-related charges. Please give me 10 minutes of your time and I will explain your options, but DO NOT sign over your deed.


Bibi Zanella - REALTOR, DSP (Designated Short Sale Professional)
Direct: (727) 403-8947
Fax: (866) 348-2681
E-mail: BibiRealtor@aol.com
2 votes
Julia & Matt, , 34684
Thu Jan 7, 2010
HI Again,

Seperated, I'd like to add that i advised you should be wary of option contracts, because I have worked them inside out, and there can be significant pitfalls if in the wrong hands. Been there, done that, and I stand by my recommendation for a reason.


Julia & Matt Fishel
Suncoast Partners @ Keller Williams Realty
1 vote
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Wed Jan 6, 2010
Our house is getting ready to go into foreclosure, we've got an investment firm wanting to "buy it".
I'm not sure if this is legal, they take over payments but mortgage still in my name but we have to sign over the deed.

I as a Real Estate Broker in Southern California get emails from these people all the time.
I went to check a few of them out to see if they are legit. None are, but they are slick talkers.
It is a scam by how they do it and the usual result is, you are still left holding the bag on your note and they have possession of your house. On average they are successful short selling about 1 in 25.
Here is scam
1. they rent your home out and never pay anyone anything.
2. they short sell your home to an associate of theirs which is fraud all short sales are suppose to be arms length. They make sure no one else can make an offer on it in the process.
3. then when the scamers short sell to an associate, they turn around and sell the property again or they rent it out for a time period of a year or two then sell it.
the short sale purchaser in this scam buys the property for less than 70 cents on the dollar on the current market. You as the name on the loan can be liable for difference plus the loan amount.

More than likely without meeting you your best option is to hire a real estate agent, who is a CDPE - Certified Distressed Property Expert to help you short sell your home and negotiate with your bank to settle your account. Then you can get on with your life.

What you may want to do.
consider all of your options.

I know you are going through hard times and are ready to grasp at straws.
Be wary of the buzzards who have no license and no responsibility.
These scammers are out to profit off of you, have no remorse, and don't care what carnage they leave behind.
I wish you the bast of luck.
Harold Sharpe
So Cal Homes Realty
1 vote
Julia & Matt, , 34684
Wed Jan 6, 2010
Don't sign over your deed and be very wary if someone asks you to sign an option contract!

What's amazing is the flurry of advice you've gotten here - most of it is solid - yet some of it is personal opinion and not fact. Talk to an attorney or two AND an experienced highly trained CDPE / Realtor with a proven track record of helping distressed homeowners in Pinellas County.

Your head's probably spinning with all of this information - yet I urge you to visit our website below for the most comprehensive imformation available about ALL of your options. It's a great place to start and please don't hesitate to call me with questions at 727-366-0324.

You DO have options and whatever you do - don't sign any paperwork giving away the rights to your house and don't pay any fees to anyone for loan modification, short sale processing, or the like, without talking to a CDPE Realtor first. I'm sorry to share this, yet there are even some attornies offering solutions that while they may have found 'legal' ways around doing things, they still aren't ethical.

Trust me, you'll feel more comfortable after reviewing your options on our website, getting a referral to a reputable attorney, and talking to professionals like us experienced with helping Palm Harbor homeowners just like yourself.

All The Best,

~ Julia
CDPE - Certified Distressed Property Expert

Julia & Matt Fishel
Managing Agents, Suncoast Partners @ Keller Williams Realty
35095 US Hwy 19 N #100
Palm Harbor FL 34684
(727)366-0324 Julia
(727)366-0325 Matt
1 vote
Fred Griffin, , Tallahassee, FL
Fri Jul 3, 2009
See an Attorney.


This company may be legitimate, but it is also a new trick used by Scammers.

Best wishes,
1 vote
Scott Godzyk, Agent, Manchester, NH
Fri Jul 3, 2009
STOP>>>> do not sign over your deed!!!! If you do you lose all ownership interest but still will be liable for the mortgage. if they do not pay, you are back on the hook again. Your best bet is to contact your mortgage company at once, ask for the home retention department, tell them your situation and ask how they can help you. Ask about loan modification, ask about forbearance where they can take your past due and add it to the total loan to bring you ciurrent or lastly if you have no ability to pay, then ask about a short sale. Dont give up and dont sign your deed away. If all else fails your best bet is a deed in lieuof foreclosure. Check to see if there is free legal help in your state. good luck with working things out.
Web Reference:  http://www.ScottSellsNH.com
1 vote
Michael Thom…, Agent, Lambertville, MI
Fri Jul 3, 2009
Bibi answered it perfectly. Only thing I might add is get their names and report them to your state Attorney's general office so they don't take advantage of others.
1 vote
Sue Archer R…, Agent, Palm Harbor, FL
Sat Jul 9, 2016
If you are ready to go into foreclosure, that implies you've had a hardship in paying the current mortgage based on other difficulties- job loss, divorce, death, etc. If that is the case, there is still the option of negotiating with your lender to arrange for either a loan modification or short sale. Both require the same analysis and your lender will want you to consider the loan modification first.

I can show you the analysis that is used in a free one hour consultation. I have done these for 9 years because I wanted to make sure no one was having their home sold out from underneath them when they had the chance to save it. When a person is already experiencing a hardship, the last thing that should happen is they lose their home unnecessarily. Here's the gist of it- analyze your income and expenses. Your personal expenses need to be about 40% of your gross income. If they are, the loan modification offer will most likely be about 31% of your gross income for all housing expenses (Principal, interest, taxes, insurance and HOA) If those numbers won't work then you may be looking at a short sale. Either way, the lender WILL NOT FORECLOSE while you are being considered for a loan mod/short sale. AND it's the same paperwork for either option as I said.

The challenge when you're already stressed is seeing the numbers clearly for what they are. There are resources that will help you see the numbers and how the lender will be looking at them. I am one of those and there are others such as attorneys that I can refer you to.

Whether you decide you want to work with an investor or not is still an option as well. There are some that are honest, but others that are not, which is why there are so many laws passed by Pam Bondi about this issue. If you decide you're going to consider their option, then I suggest that you speak with an attorney. One hour can protect you and will be worth the money. I have some resources there as well.

Get informed, and you will be okay.
0 votes
Alma Kee, Agent, Tampa, FL
Sat Jun 9, 2012
What happened? I see this was posted almost 3 years ago!

Nowadays an owner may be extremely foolish to sign over their deed because some lenders are offering HUGE incentives to borrowers to do a Deed In Lieu, Short Sale or Deed for Lease. One of my tenants actually got $35k to do a short sale.

Also some lenders are reducing principal balances by as much as $100k so if you are foolish to sign over your Deed you may have to "payoff" that "investment firm" (probably scammers) that convinced you to hand over your property!
0 votes
Ccfein, Home Buyer, Clearwater, FL
Sat Jun 9, 2012
dont do it. call your mortgage company for the best advise
0 votes
Loretta Buck…, Agent, Palm Harbor, FL
Sat Sep 18, 2010
Just an update for anyone following threads such as this one--lenders have caught on to the various different investment schemes such as this one, and now have specific verbiage in their short sale contracts and addendums which prohibit 'flips'.

0 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sat Jan 23, 2010
Well I note that this is over 6 months old now. First, note that this was not a question and second a lot of agents here are coming extremely close to giving legal advice. Watch out for trap questions from unknown sources. They may be looking to get an agent to lip up and face a hefty fine.
0 votes
Pamela Cohn, Agent, Clearwater, FL
Sat Jan 23, 2010
Dear Separated,

Sounds like you are going through some hard times. Stress, emotional and economic, weigh heavy on your decision making. "Options", "assignments", and "subject to" contracts may be legal, but from the Seller's point of view should probably be the very last resort. Yes some could be shady, illegal or Fraud. As another agent already pointed out, there are a lot of scams out there. The worse the economy, the more prevalent the scams. Consult with a real estate attorney before entering into any of these relationships. NO don't ever sign your deed over to anyone without YOUR own real estate attorney's review.

You have to ask yourself, "Why doesn't the Buyer just buy the house?" When a buyer wants less than a straight forward sale? It doesn't mean the buyer is wrong, but the sale is heavily weighted in the buyer's favor and there is a higher RISK factor for the Seller. The Seller could end up without an asset and still have the debt.

I would suggest consulting with a real estate attorney to discuss the best options open to you at this point and then interviewing with a few professional Realtors to get a realistic picture of your homes market value, look at your listing options, if you are upside down discussing the feasibility of a short sale and meeting with your Lender's Loss Mitigation department to discuss your options and/or their requirements and package to be completed for a short sale.

Good Luck. If I can be of assistance call or email.


Pam Cohn
Broker Associate, GRI, CDM
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
0 votes
The Monson C…, , Portland, OR
Wed Jan 6, 2010
I would advise that you speak with an attorney before you proceed forward with anything.

There are quite a few scams out there, so many that the federal government recommends NEVER signing over the deed to your home to anyone while in the situation you're in.

The Monson Corcoroan Group, Inc
Office: 503-775-4699 Ext 156
Cell: 503-267-9221 or 503-729-4321

John L. Scott Real Estate
0 votes
Leasing To O…, , Dallas, TX
Wed Jan 6, 2010
Thank you Don Tepper, once again, for being the voice of reason.

It's kinda comical how most Real Estate Agents automatically jump to conclusions about how (just because they don't know how to do something like a subject-to deal or heaven forbid bring up the dreadfully scary "option contract"), it's all illegal and everyone is a scam artist stealing homes left and right. :)

And I particularly get a good chuckle when people and Brokers like Mr. Harold Sharpe say "I'm not sure if this is legal but......" and....."Be wary of the buzzards who have no license and no responsibility. These scammers are out to profit off of you, have no remorse, and don't care what carnage they leave behind." Or when Brokers like Mr. Michael E Thompson automatically say..."get their names and report them to your state Attorney's general office so they don't take advantage of others."

News Flash.... There ARE people out there who have invested their time and money to learn other ways to buy and sell houses. And now for the REALLY SCARY part... we can actually make money doing it while creating a win~win for everyone. I know...i know.... Kinda hard to believe, huh?

Maybe if just a few more Real Estate Agents out there would take the time to educate themselves, they could see that, YES there ARE people out there who don't have (((clearing my throat......))) or want a license and create solutions that a typical Real Estate Agent can't fathom. Better yet, take a minute and go onto http://www.Realtor.com where they sell books on Subject-to's. Go ahead.....i'll wait patiently. Oh, Oh...wait, I got one for ya. How about a Nationally recognized Broker from Keller Wiliams who is also a writer & Investor and was asked to speak to other Real Estate Agents on creative buying and selling techniques (Wendy Patton)?

Are there scam artists out there.....yes. Are there unethical Real Estate Agents out there....yes. Does that mean that ALL are like that.....I sure hope not. Come on people....Let's not all jump to conclusions and say things based on ignorance or pure opinion.

Don and I both know people who successfully do these type of transactions but Don did put it pretty well when he said:
"......However, to repeat, it's very, very risky for you. And before you even consider it, you should explore the other options mentioned below: loan modification, short sale, examination of paperwork to detect errors when you purchased the property, and so on."

No matter what route you take, EDUCATE YOURSELF, and it's a really good idea to retain the services of a knowledgeable Real Estate Attorney to look over anything before you commit to it. If they, being the Investor, are on the up-and-up, they'll have no problem talking to your Attorney & having him/her look it over.

no license
not a buzzard
not into carnage
loves option contracts :)
0 votes
Gwen Campbell, , 34683
Sun Jul 5, 2009
Never sign over your deed! You have many, many options to handle your home in this situation, but none of them need to be giving over your deed. There are even situations where investors may "buy" your home and resell it, but you keep the deed until you or your bank is paid what they have settled for. And you never need to move out of your home unless you choose to unless the bank forecloses. There are scams out there that also require that you move out of your home during their "processing" time thereby incurring even more expenses and risk. This and signing over your deed are extremely risky to you. As was said before, you can get a reputable Realtor to handle your sale, negotiate with your bank and explain the various options you have. You can also contact a HUD counselor as there are a few right near Palm Harbor that can explain options and help you explore what you can do and help you decide what is your best course of action. And often, when you are going through a short sale, if that is what you choose to do, this HUD counseling may be required. Do this under the guidance of a licensed Realtor that has a good track record of helping people with distressed properties. Please let me know if I can be of help in your situation.
Gwen & Doug Campbell
Keller Williams Realty
35095 US Hwy 19 N Suite 100
Palm Harbor, FL 34684
0 votes
David Chambe…, , Saint Petersburg, FL
Fri Jul 3, 2009
I agree with Don, this is a valid investment stratagy for the investor and I have seen it used to help speed up the shortsale process.

I would still caution you to be careful.

It is also part of a take your sh%$ campain, as a backdoor way of buying a property, whereas the people buy. get or take the following items:deed, contractor liens, tax liens, second mortgage and then beat up the first mortgage.
0 votes
Beatrice Dus…, Agent, Clearwater, FL
Fri Jul 3, 2009
Excellent answer from Bibi Zanella! Speak to a Professional Realtor that has experience with Short Sales... That is the key. List your home and get it sold quickly and avoid foreclosure. Bank will pay commission and seller related charges. DO NOT sign over the deed. Please do not hesitate to call if you would like a consultation on what options you may have. Best Regards,
0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Jul 3, 2009
Dear Seperated,
You can very easily lose your home and keep your debt. Be very afraid.
Do some back ground checking. What is the name of the individual or company? Do they own property in Pinellas, Pasco or Hillsborough counties? Do they have a real address you can go to? Are they working in collusing with a real estate broker or agent? Do they hold a professional license in Florida? Have there been complaints filed against the individual or company? Check social sites like http://www.ripoffreport.com If you can not do this, forward the data to me. If they are fraudulent I will forward the information to a local attorney who will follow up with the Annorney General office.

Best solution. Let me refer you to legal counsel who will investigate if your laon was appropriate in the first place, pursue loan modification and if needed will negotate your short sale for your. Negotiating contracts with a bank requires an attorney. An attorney can bypass the call center interference the consumer and real estate agent, and investor encounter. You can be on the hook for deficent collection for 18 years if not handled properly.

Citizen or agent, call so we can put a stop to these practices!
Please call.
Annette Lawrence
ReMax ACR Elite Group, Inc
727. 420. 4041
Web Reference:  http://www.MyDunedin.com
0 votes
Loretta Buck…, Agent, Palm Harbor, FL
Fri Jul 3, 2009
Another trend surfacing recently is the option contract--many 'investors' are having distressed homeowners enter into an option contract (at absolutely no risk to themselves as the investor), and they then attempt to resell the property for a profit while negotiating a lowball offer with the lender.

There is nothing illegal about this, however anyone considering such a step should consult with a professional who can go over each aspect in detail prior to making any commitment. A well-trained and seasoned veteran of short sales negotiation should be able to handle selling a house for a qualified short sale candidate without having to resort to these measures.

On a brighter note--this sort of activity does indicate a 'bottom'--the bottom feeders are having a feeding frenzy!

Please feel free to contact me directly if you have any other questions--I am your neighbor right here in Palm Harbor!
0 votes
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