Subject - To Financing

[Ryan Blake]

Hey BP, I need help. Looking to try and get a home using existing financing.

I understand how to sell it to the seller by letting them know that it could help their credit because I will be making full payments on time, that I will be able to offer more money to them because I won't have to get new financing, and that they will still get their equity out right away.

I understand how to buy the property using lines 203 and 503 of the HUD-1 "Subject to existing financing" and ensuring that the title company being used has closed using sub-to financing before.

What I am unsure about it how to verify with the bank that the seller is current. I am guessing I would need them to either add me on their account or call the bank with them present. The big issue I am concerned with is trying to buy a home that has foreclosure proceedings filed (so the owner is behind). I want to ensure with the bank that if I get the account current that they will stop the proceedings and stop the accruing of penalties. Then I would still be able to close on the property using sub-to and carry the existing financing.

Any advice on this would be great. Thanks to all of you for sharing your knowledge.

[Wayne Brooks]

You need to be added to their account as an Authorized Third Party (there are forms) and most recommend a Power of Attorney from the seller authorizing you on the account, along with the “you Mr. Seller are going to get screwed if I stop making payments” disclosure forms.