Seller Financing Question

[Jon Huber]

A seller is attempting to do a short sale, as they owe more on the property than what the property is worth. However, the sellers are up to date on their payments and not in default. For the sake of argument, lets say the house is worth $120k, and they owe $150k.

Now, if the bank won't give them a short sale because they are not in default, could I take over the payments and purchase the house for the $150k they owe? I would essentially be overpaying by $30k in the long run, but I would also be purchasing the house with no money down. The sellers are forgiven of their debt and off the hook for their mortgage, the bank gets the money that they lent out, and I buy a house for $0 down.

Could this scenario play out this exact way?

[Wayne Brooks]

You're describing a sub2. The sellers are not "forgiven of their debt" until that loan is completely paid off, as it's still in their name. If it's an FHA loan, it is possible for you to Assume the loan, if you qualify, and go through the approval process.