Assumption of Mortgage

[Bill Cookson]

What is the name of your state? Washington

I sold a home to a couple who own several properties at a time to generate cash flow to earn personal income. They could not borrow enough to make the purchase, and so I agreed to hold a second deed of trust for a smaller stake and they signed a promissary note to make payments to me for 5 years, and at the end of that time they had to make a ballon payment. There is 1 year left in the contract.
After a few years, they encountered serious financial trouble and were delinquent in their payments to their primary lender and to myself. Recently, they filed for chapter 11 bankruptcy and now the primary lender is ready to begin a foreclosure process.
The buyer had been trying to sell the property but had no luck, and they called me and asked if I want to buy the property from them for 1/2 of their equity ($7000) and assume their mortgage to own the property. I live now 3000 miles from the property and would like to buy it to get my money back and capture a little profit on its value today. Foreclosure is too risky for me.
My questions are how is the assumption of a mortgage done?
Do I need to qualify for the primary mortgage? What must all be done before I begin any payments?
I am meeting with the bankrupt buyer and their lawyer 12/26, and I have only a few days to get this straightened out. After that, I will sell the house.

 

[HomeGuru]

What is the name of your state? Washington

I sold a home to a couple who own several properties at a time to generate cash flow to earn personal income. They could not borrow enough to make the purchase, and so I agreed to hold a second deed of trust for a smaller stake and they signed a promissary note to make payments to me for 5 years, and at the end of that time they had to make a ballon payment. There is 1 year left in the contract.
After a few years, they encountered serious financial trouble and were delinquent in their payments to their primary lender and to myself. Recently, they filed for chapter 11 bankruptcy and now the primary lender is ready to begin a foreclosure process.
The buyer had been trying to sell the property but had no luck, and they called me and asked if I want to buy the property from them for 1/2 of their equity ($7000) and assume their mortgage to own the property. I live now 3000 miles from the property and would like to buy it to get my money back and capture a little profit on its value today. Foreclosure is too risky for me.
My questions are how is the assumption of a mortgage done?
Do I need to qualify for the primary mortgage? What must all be done before I begin any payments?
I am meeting with the bankrupt buyer and their lawyer 12/26, and I have only a few days to get this straightened out. After that, I will sell the house.

**A: with respect to an assumption of mortgage, you need to be meeting with the lender. Assuming that an assumption of the mortgage is allowed. Make sure you ask the Buyer for a copy of the mortgage, note and current preliminary title report. If they are having financial problems what else did they not pay? Non payment of real property taxes and other taxes, contractors etc. could have resulted in liens filed against the property.
Even with an assumption, you would need to qualify as if you are getting new financing unless the loan is a non-qualifying assumable type loan. Contact the lender asap. If they do not allow an assumption see if you can get a new loan from them. At the same time contact a mortgage broker to shop rates and terms.

 

[Bill Cookson]

Thanks

Thanks for the quick response.
The buyers were penalized for late and/or non payments amounting to about $12,000, and this was added onto their mortgage. They owe much more now than what they started with 4 years ago when they bought the property. The house is appraised at about $30,000 more than what the current buyer owes everybody, including me.

 

[HomeGuru]

Good, at least there is some equity in the property.

 

[Huffman]

Sign the house over to you

Have them deed the house back to you, then refi the property to pay them, and stop the foreclosure. Or, have them deed the property back to you and pay them cash. You probably have a few months left to sell the home while it may be in foreclosure. Whats the bank going to do if the house has changed title? Call the note due on sale and foreclose? Who cares.
There are tons of ways to handle this, other than conventional.

jh

 

[HomeGuru]

Re: Sign the house over to you

Have them deed the house back to you, then refi the property to pay them, and stop the foreclosure. Or, have them deed the property back to you and pay them cash. You probably have a few months left to sell the home while it may be in foreclosure. Whats the bank going to do if the house has changed title? Call the note due on sale and foreclose? Who cares.
There are tons of ways to handle this, other than conventional.

jh

**A: I do not agree that there are tons of ways to handle this.
Some of the options here are far-fetched.

 

[Huffman]

Bill, handle this however you want. This website is basically for entertainment purposes only. You need to retain councel in your area. All state laws vary.

As far as Ohio laws, what I proposed to you, is how I run my bussiness. I buy and sell foreclosures. All mortgages are assumable, period. I know how to do this legally, in any state. AND, I do it. I'm not selling a thing, nor do I care.

The only thing far fetched here, is this web site.

 

[HomeGuru]

Bill, handle this however you want. This website is basically for entertainment purposes only. You need to retain councel in your area. All state laws vary.

As far as Ohio laws, what I proposed to you, is how I run my bussiness. I buy and sell foreclosures. All mortgages are assumable, period. I know how to do this legally, in any state. AND, I do it. I'm not selling a thing, nor do I care.

The only thing far fetched here, is this web site.

**A: you should care somewhat about your spelling.