Section Two Financing (Pace Morby)

[Brady Ascheman]

Hi everyone, I recently watched the BiggerPockets Podcast (300 Doors ALL Through Creative Financing w/ Pace Morby) I'm on my 5 time watching it trying to comprehend everything that Pace does. I was just curious if anyone on here has bought using section two and taken over the seller mortgage before. Some questions that come to mind. When you do this do you actually pay the bank the mortgage amount or is that still the responsibility of the seller of the home? If the case is that you pay directly to the bank wouldn't the bank find out every single time you did this and call due on sale? If the seller of the home still is the one that pays the mortgage and you just pay the seller then wouldn't you have to worry about the seller not paying the mortgage payments and then the bank would foreclose? Comments would be much appreciated if anyone has experience in this field please connect with me I would love to talk more personally with someone about this. Thanks so much 

[Doug Pretorius]

@Brady Ascheman when taking over payments I've always paid the bank directly. And no in 20 years the bank has never called a loan due. I've physically gone to the seller's bank with the seller, sat down with the manager and told them I'm taking over the payments, and the bank has still not called the loan due.

As an alternative to paying the bank yourself you can use a loan servicing company. You can set it up so they will take the money from your tenant, pay you, pay the bank, pay your insurance, taxes etc.

Never, ever, let the seller take your money and trust that they're going to pay the mortgage. Most of the sellers who agree to a payment takeover deal are horrible with their money. Once they leave the house and are no longer emotionally tied to it, the second they start having new money problems they will spend your money on something else forgetting that the bank is going to foreclose if they do that.