land contract

[George P.]

easy question and i do not seem to be able to find the answer (even though i posses google-fu skills).

so, on to my question:

q: if i have a mortgaged property, can i sell it on a land contract??

Some details:
1. outstanding mortgage amount is 40k at 30 yrs.
2. still have to contact the lender (provident) to see if i have a clause in the contract that does not allow me to do that.
3. do not have a buyer, but if the answer is a "yes", will list it on the MLS.

[Jon Holdman]

An alternative would be a wrap mortgages. You and the buyer create a new mortgage (or deed of trust, if that's whats used in your state.) You sell the house with a warranty deed, you as grantor, buyer as grantee. You get back a mortgage from the buyer, buyer (borrower, really) as grantor, you as grantee. The buyer makes payments on this new "wrap" mortgage. You make payments on the underlying mortgage. If you want, find an escrow service to handle all the payments.

Now the buyer has security (the deed) and you have the ability to foreclosure (the mortgage.)

All these variations violate the due on sale. You're just going to have to live with that risk, IHMO. There are some ways that are claimed to mitigate it, but I'm not convinced they have much effect.

Since you and the buyer are, I assume, cooperative, you can work together to handle the trickier aspects. Insurance for example. You add him to the policy, and he starts paying. If there is a claim, you help deal with any paperwork and he gets any money from the claim.