Wrap mortgage / subject to / Owner finance

[Jeff Warner]

Hey guys, 

Here's a deal that I'm looking at and need some advice on how best to proceed...

SFH $149K, comps show $170k

Seller is willing to take $65k (his equity) and have me assume the mortgage (84k, $650 / mo). He called the bank and they said it's not assumable (I haven't looked at his paperwork so just going off what they said). I have a very good friend that is willing to loan me the $65k for 12 months, the goal is to then refi and pay off both loans in that 12 months.

This is a home I'm going to live in, not flip, so it would be an owner occupy refi. I made the mistake of too many write offs with my business and can't currently qualify for the $149k.

Here's my main question: Is there a way to do a "seller finance" on this home legally, seeing as he is not in first position or would this be considered a wrap or subject to? As far as I know, most title companies won't close on this without approval of the bank that's in first position, at least Ticor won't. How would you proceed on this deal?

[Cody L.]

Funny that "too many writeoffs", when legal, is a mistake.

That's how dumb our lending is. Doing all legal writeoffs is a good financial move for an individual, yet I've had banks tell me they can only do a (conventional) loan if I pay more in taxes than I'm legally obligated too.

I said "so you'd rather your borrower pay MORE money to the IRS?"

The government did a good job of fooling the people to accept IRS income as the only way to qualify your income in the name of "protection" from "predatory lenders". When really it was a way to get people to pay more taxes so they could get loans.