Purchase Property Subject To Existing Mortgage

[Theodore Sisul]

Good Afternoon Everyone:

I am looking to buy a property subject to existing financing (Subject To) in the Lake County, Florida area.  I was wondering if anyone in either Lake County or the greater Orlando area has experience acquiring property subject to existing financing?

I am looking for a subject to deal to get my first home as a primary residence.  Then would be interested in repeating the process.

Are there any realtors and attorneys in my area (or that would service Lake County) who could help? 
 

[Account Closed]

Quote from @Jay Hinrichs:

Quote from @Eliott Elias:

Quote from @Account Closed:

Quote from @Theodore Sisul:

Good Afternoon Everyone:

I am looking to buy a property subject to existing financing (Subject To) in the Lake County, Florida area.  I was wondering if anyone in either Lake County or the greater Orlando area has experience acquiring property subject to existing financing?

I am looking for a subject to deal to get my first home as a primary residence.  Then would be interested in repeating the process.

Are there any realtors and attorneys in my area (or that would service Lake County) who could help? 

What will you do if you move in and 6 months later the bank calls the loan due?

 What will you do? Go ahead and shed some light on this topic.

here is what you do if its called. Pretty simple really.

1. cut a check payoff the loan
2. refi the property pay off the loan
3. sell the property pay off the loan
4. further negotiation with the lender which could include a payment to reduce the principal IE modification.

His problem is "I am looking for a subject to deal to get my first home as a primary residence."

1. Most new investors don't have $350,000 cash to write a check, to pay off the loan, if the Due on Sale clause is invoked.

2. Most lenders won't refi a loan that has only 6 months seasoning, especially if it is in someone else's name and then they would probably do 80% LTV at most. Where does the rest of the money come from? Most people who want to buy a personal residence using "Subject To" lack something that lenders want in order to qualify for traditional lending. (credit score, income DTI, accepted appraisal, repairs) so they won't qualify anyway.

3. Since you are given 30 days to cure a Due on Sale in most instances, selling is out of the question. You can't list, find a buyer, and close in 30 days, especially in this market.

4. Hard Money Lenders won't lend on a personal residence.

5. The lender might negotiate, but when the interest rate is 2.5% on their money and they now can get 8%, they are incentivised to call the note and leave the original borrower hanging. Often times, the borrower who sells on “Subject To” has been a problem borrower anyway (lates, loan mods, etc)

If the lender calls the note, and forecloses, that shows up on the seller's credit report. I'd probably sue someone that did that to me, after assuring ne they were going to "take care of things". Plenty of attorneys wil take that suit. Look for bank fraud, wire fraud and equity skimming to be in the legal complaint. 

I predict a lot of lawsuits coming out of this Subject To mainia. I call it "The Attorney Full Employment" Phase of the "Subject To" mainia. I think the Attorneys General of several states will take interest.

I've watched a few of the videos, it's demonstrably Bad Training, False Hopes, Overleveraging, unsophisticated lenders ("gator lenders" formerally known as "gap" lenders and "bridge loans" who get burned) and that will lead to disasters and more legislation. It will probably spill over to wholesaling, because in the minds of banks and regulators, the two techniques fall into the same category.

"Subject To" is legal when done legally and wisely, but "legally and wisely"  is not what I'm seeing happening in the creative financing space right now.