All Forum Posts by: Keith W.

I would look at it as an option to help the seller, along with short sale or cash purchase. 

Cool. Wonder if it’s a US Bank thing about no assumptions. 

I would look at it as an option to

Today, I came across a term for me: Assumable Mortgage. As delved into it to learn more, I found that these loans are virtually non-existent anymore? Is that for the exception of FHA or VA backed loans?

Diving even deeper at Youtube University, I came across a video that presented a workaround for an assumable mortgage. 

Basically, the owner agrees to participate for whatever reason. Most likely the house is in distress, in disrepair, need to relocate, whatever. You offer to assume the mortgage. (The video mentioned the term "wrap" which is how you will explain it to the title company) 

Part of the process is getting the deed transferred to your name either via quitclaim or title company, which I assume is a warranty deed. 

In addition, set up Power of Attorney which allows you to communicate with the bank on the owner's behalf. This gives you the ability to pay the mortgage, taxes, negotiate, etc. etc. 

Although banks no longer allow assumable loans, they do allow the property to be placed into a trust. Because you have power of attorney, you are able to communicate with the bank to find out what type of trust is allowed. 

The next step is to set up the trust with you as the trustee. As the trustee, you have the ability to control what goes on with the property. You can rent, sell and I would assume cashout refinance. 

This is just a summary of the process. I didn't get into balance on the loan, equity, after repair value and all that. I'm just wondering if all this makes sense and sounds legitimate? 

Thanks for the input. As I’m just getting into the business, I don’t have much of a network but I will look into that option. 

During the real estate debacle a few years back, I fell victim to getting a loan modification workout understanding the terms. Maybe not a victim because I still own my house, but sort of because now I know there were other options. 

Anyway, a $100k silent second mortgage was placed on my home. This is the victim part because you are not made aware of this when you’re going through it. I’m sure it’s in the legal fine print somewhere but when you’re on the verge of losing your house, your focus is more on the bottom line. 

Anyway, this information doesn’t show up anywhere. Mortgage statement, credit report, nowhere until a title search is done by the bank when you want to sell or refinance. That’s how I found out about it. I called my bank and they had to do research to find info on it. 

So now I'm in the position of having to consolidate my first mortgage of $270k with the silent second of 100k in order to get an HELOC for another $100k in order to get my real estate investment business started.

I’m be going from a $270k mortgage to $370 with 100k to work with to acquire property. I plan I’m using the Buy Rehab Refinance strategy and make lump sum payments on my home mortgage to bring the balance back down.  

Does this sound like a smart strategy? My hard money lenders all require 10% down on any property I want to invest in and I would need money to get the work started. 

I’m thinking if I ever sell my house or do anything financially, I’ll have to deal with that $100k second at some point. 

Please advise with tips or suggestions, alternatives. 

@Ned Carey Thanks. The monies in question are supposed to go into escrow. And I planned on having a closing attorney and title insurance involved. 

Two sticking points that came up since this posting are 1, my contractor estimated repair way out of alignment with ARV and other criteria. ( he's only seen video and pictures thus far)

and 2, who knows how long the city may take to actually clear tile and draw new ones etc. time is of the essence. 

Ah! Got it. I was concerned myself and inquired about escrow. I guess he has an attorney he works with. Another concern is how fast (slow is probably more appropriate) the government would be in doing their part. Time is of the essence. Thanks for your input. 

@Jacob Sampson I don't know him personally but through our conversations, he's been flipping properties for awhile. 

No, I'm depending on the BP Community to guide me through this. 

So, in your opinion, do you think I should wait until the property is clear in his name? In other words, let him purchase the property then I buy from him directly? 

or what is your issue with the deal? 

First, let me express how it is such a blessing to have the BP Community to turn to for credible advice without. I might have been ventured into real estate had I known something like this was out there!

On to my question. I'm interested in making an offer on a cash money deal with a private seller.  The seller stated that he got the property through a tax lien auction and the county is ready to close. Apparently, he is trying to flip the property to someone else and use that money to close with the county. 

Anyway, he stated that if I wanted to lock up the deal, I would have to put down a $1000 deposit, Purchase & Sale with an additional $5000 and all the money within days. 

He goes on, that this is a City foreclosure and once the money is paid it will be sent to the city attorney. He will go to the Housing Court to get a release and draw the deed. 

Does this seem like normal procedure?