Have you transferred a property to new owner via LLC? Almost like assuming a mortgage

[Jon Ladas]

Hey all,

A developer I was talking to told me about a way to acquire properties by having the seller put the property in an LLC and transferring ownership of the LLC (or selling the LLC) with all it's assets to a new owner. The idea behind this is it avoids having to get qualified by a bank and closing costs. Think of this as an assumable mortgage without having to go through underwriting. So the goal would be for the property to be transferred to a new owner while keeping in tact the same mortgage.

Here's an example of what I'm attempting to articulate:
Betty owes $500,000 on her home at '123 Banana Street'. This $500,000 property has a 30 year mortgage with 25 year left at a 3% interest rate. Betty puts '123 Banana St' into 'Banana St LLC' and transfers/sells 'Banana St LLC' with all its assets to a fellow names Jerry. Jerry now owns 'Banana St LLC' and all its assets. So now Jerry "owns" 123 Banana St with a $500k mortgage at 3% interest.

So my question is: Could anything change with the mortgage if the LLC is under new ownership (other than a bank potentially calling the loan due which is typically in any 30 year fixed) 

Then the icing on the cake: Obviously I'm attempting to pull this off right now lol. The kicker is that the seller currently has an FHA loan on the property. I was just going to assume the mortgage but this LLC transfer would be much faster and time is of the essence (per usual).

Does anyone have experience with this? 
Does anyone have experience doing this with an FHA loan?
I have a call with my attorney tomorrow but figured I'd ask here for additional info and any experiences others have had. 

Hopefully I've explained clearly but if not drop some questions below and I'll try to clarify any confusion.

And I'm sure there are state specific guidelines so if it makes a difference I'm in Massachusetts 


Thank you!!