"Subject To" Question -- Informing the Lender

[Ryan Urban]

I have read that the best thing to do when taking over a loan "Subject To", is to immediately inform the lender so that everything is out in the open up front. Three thoughts on this, and I'd like your input:

First, while I do agree with full disclosure, I wonder if this is asking for trouble by willingly firing up a red flag.

Second, I wonder if the lender would mind a new payer, especially in today's market. If the original borrower can't make their payments, at least there's a chance you can. Foreclosures are up, this may be the best time for "Subject To" buying.

Third, if your credit is good, wouldn't it be a good idea to tell the lender that, or allow them to check your credit if they're unsure of the transaction?

Thanks for your help on this!

Ryan

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[Steve Babiak]

Originally posted by Financexaminer:

... If a notice of demand has been made, it's usually too late since the lender will not be accepting past overdue payments.

...

Bill,

I find that most lenders will have a "reinstatement amount" that when paid will return the loan into a performing status. So, one could first reinstate by making that payment, and then proceed with taking over the payments subject to the existing financing.