SUBJECT TO FINANCING, LETTER TO THE BANK, NOTIFY THE BANK?

[William Metts]

I’ve read/maybe heard online, that a letter can be sent to the lender informing the lender the property is being bought subject to financing. Currently, I’m buying properties subject to by not telling the lender of the sale. The property is put into a trust (beneficial interest signed over to me), and I act as a property manager and trustee. I understand this is shady, but it keeps the lender from pulling the trigger on the due on sale clause. However, I’ve had a situation backfire. The seller needed insurance at her new apartment/condo, but no longer lives at the house/prior residence (homeowners policy). The bank informs her she has to cancel the homeowner policy (old house) and replace it with a landlord policy. To make a long story short, the name of the new owner of the house (me), does not match the name on the insurance policy (the seller). Not trying to further defraud/lie to the lender, I tell the bank I’ve been paying the mortgage for the last 12 months and that I bought the property subject to financing. I now have a landlord policy in place, and the lender knows I’m the new owner. It hasn’t triggerd the due on sale clause (yet) but I’d like to get to a point where I can inform the bank of the subject to transaction. Does anyone have a letter that they send to the lender that the property is being bought subject to and will be owned by the new owner (me)?