If insurance is your concern, you should put the property in a trust. Make the seller the beneficiary of the trust and you are the trustee. Make sure that you have power of attorney for the seller. Then you have the seller assign HIS beneficial interest over to you individually.
Now you are the trustee and the beneficiary. None of the trust documents get filed, so all you have to do is show the insurance co. or the bank the documents that say the seller is still the owner. No change of ownership. If there is ever a claim on the insurance and they make a check out to the owner, you have poa for him anyway. Lots of hassle and signing for the seller.
From my expereince- 8 yrs- I would say that the bank is not going to accept. they implicitly will word in their accepted contract -NO ASSIGNMENT -now what you do between the end buyer and yourself is something different. you have to be on top of things these days - title companies have full disclosure - no 2nd place money paying first money like we used to do it.
I would team up with someone experienced, watch,listen and learn.
good Luck
Matthew
15 yr mortgage and investment pro
No, banks will consider your lower price as the market value. The way to get around it is to have the home owner transfer the property into a land trust naming you as the trustee and then sell the house to you buyer and collect your trustee fees after close of escrow which would not appear in the final HUD-1 thus the lender would not find out.
How would they do that without paying off the full mortgage? Looks like you some sucker/investor getting ready to be out of a lot of money. A homeowner, who already has lots or reasons to just take your cash...Im 100% certain that no mortgage company would front the money, in that situation...
H.R. 1876: To amend the Internal Revenue Code of 1986 to exclude from gross income of individual...
To amend the Internal Revenue Code of 1986 to exclude from gross income of individual taxpayers discharges of indebtedness attributable to certain forgiven residential mortgage obligations.
Go to... Bill Status Summary Other Info
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shortsale: ...legislation that would change the current law that forces these homeowners to pay income taxes when they have had a part of a mortgage loan forgiven or have been forced to foreclose because of their inability to pay their mortgage. The Bill is H. R. 1876 or the Mortgage Cancellation Tax Relief Act. “How can we add insult to injury? As if losing your home isn’t painful enough, to turn around and tax a family on what the government calls income is distressing,” said NAR president, Pat Vredevoogd Combs.... [Apr 20, 2007 4:11 PM]
(Link to this page in your blog for your comments to show up here!)Apr 17, 2007 Introduced
- Scheduled for Debate
- Voted on in House
- Voted on in Senate
- Signed by President
This bill is in the first step in the legislative process. Introduced bills go first to committees that deliberate, investigate, and revise bills before they go to general debate. The majority of bills never make it out of committee.
Bill Overview
Sponsor: Rep. Robert Andrews [D-NJ]show cosponsors (17)
Cosponsors
Rep. Neil Abercrombie [D-HI]
Rep. Henry Brown [R-SC]
Rep. Steven Chabot [R-OH]
Del. Donna Christensen [D-VI]
Rep. Elijah Cummings [D-MD]
Rep. Philip English [R-PA]
Rep. Anna Eshoo [D-CA]
Rep. Rush Holt [D-NJ]
Rep. Walter Jones [R-NC]
Rep. Ric Keller [R-FL]
Rep. Ron Lewis [R-KY]
Rep. Carolyn McCarthy [D-NY]
Rep. Ronald Paul [R-TX]
Rep. Donald Payne [D-NJ]
Rep. Todd Platts [R-PA]
Rep. Jon Porter [R-NV]
Rep. Bennie Thompson [D-MS]
Cosponsorship information sometimes is out of date. Why?
Last Action: Apr 17, 2007: Referred to the House Committee on Ways and Means.
Full Text: View Full Text of Bill
This bill is identical to S. 1394 (Status: Introduced).
Other Bills with the Same Title
108th Congress: H.R. 666
109th Congress: H.R. 3458
Committee Assignments
This bill is in the first stage of the legislative process where the bill is considered in committee and may undergo significant changes in markup sessions. The bill has been referred to the following committees:
House Ways and Means
To cite this information, we recommend the following:
GovTrack.us. H.R. 1876--110th Congress (2007): To amend the Internal Revenue Code of 1986 to exclude from gross income of individual..., GovTrack.us (database of federal legislation) <http://www.govtrack.us/congress/bill.xpd?bill=h110-1876> (accessed Jul 25, 2007)
Because the government takes a day or two to post legislative information online, GovTrack is usually current as of the start of the previous day.
I would definately consult a real estate lawyer.
You want to protect yourself and allow yourself an exit strategy. You may consider the ,assigns to, option which will give you the option of selling and or sub leasing and making money on the cash flow.
What terms and interest rate are at play here.
are you buying at future market value or present market vale?
The term no money down sounds tempting, but in the long run if you do not do your home work it will cost you dearly.
Someone I forgot who, in another forum suggested adding at "your signing these financials under penalty of purjury for accuracy".
I think that is a great suggestion.
If insurance is your concern, you should put the property in a trust. Make the seller the beneficiary of the trust and you are the trustee. Make sure that you have power of attorney for the seller. Then you have the seller assign HIS beneficial interest over to you individually.
Now you are the trustee and the beneficiary. None of the trust documents get filed, so all you have to do is show the insurance co. or the bank the documents that say the seller is still the owner. No change of ownership. If there is ever a claim on the insurance and they make a check out to the owner, you have poa for him anyway. Lots of hassle and signing for the seller.
Please read the article I contributed a few years back:
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=472&PHPSESSID=br40v1ci05jpjkv1c80dr9slq3
Any other methodolgy could bite you hard, in the event of a claim...
[addsig]
From my expereince- 8 yrs- I would say that the bank is not going to accept. they implicitly will word in their accepted contract -NO ASSIGNMENT -now what you do between the end buyer and yourself is something different. you have to be on top of things these days - title companies have full disclosure - no 2nd place money paying first money like we used to do it.
I would team up with someone experienced, watch,listen and learn.
good Luck
Matthew
15 yr mortgage and investment pro
Specialist -
Do you have any other ideas that might work here?
My brother got a real estate program from Joh Alexander and it has an invoice for release. Have you heard of such thing?
Or do I need to get hard money to close and then sell to end buyer?
No, banks will consider your lower price as the market value. The way to get around it is to have the home owner transfer the property into a land trust naming you as the trustee and then sell the house to you buyer and collect your trustee fees after close of escrow which would not appear in the final HUD-1 thus the lender would not find out.
"...then sell the house to you buyer"
How would they do that without paying off the full mortgage? Looks like you some sucker/investor getting ready to be out of a lot of money. A homeowner, who already has lots or reasons to just take your cash...Im 100% certain that no mortgage company would front the money, in that situation...
rglover
What are you saying exactly? Not tracking.
I could find the effective date of the law.
H.R. 1876: To amend the Internal Revenue Code of 1986 to exclude from gross income of individual...
To amend the Internal Revenue Code of 1986 to exclude from gross income of individual taxpayers discharges of indebtedness attributable to certain forgiven residential mortgage obligations.
Go to... Bill Status Summary Other Info
Bill Status
On Congresspedia
Be the first to start a collaborative analysis of this bill on Congresspedia, a wiki for Congress. In the Blogosphere
1 comments via Technorati:
show user commentary
shortsale: ...legislation that would change the current law that forces these homeowners to pay income taxes when they have had a part of a mortgage loan forgiven or have been forced to foreclose because of their inability to pay their mortgage. The Bill is H. R. 1876 or the Mortgage Cancellation Tax Relief Act. “How can we add insult to injury? As if losing your home isn’t painful enough, to turn around and tax a family on what the government calls income is distressing,” said NAR president, Pat Vredevoogd Combs.... [Apr 20, 2007 4:11 PM]
(Link to this page in your blog for your comments to show up here!)Apr 17, 2007 Introduced
- Scheduled for Debate
- Voted on in House
- Voted on in Senate
- Signed by President
This bill is in the first step in the legislative process. Introduced bills go first to committees that deliberate, investigate, and revise bills before they go to general debate. The majority of bills never make it out of committee.
Bill Overview
Sponsor: Rep. Robert Andrews [D-NJ]show cosponsors (17)
Cosponsors
Rep. Neil Abercrombie [D-HI]
Rep. Henry Brown [R-SC]
Rep. Steven Chabot [R-OH]
Del. Donna Christensen [D-VI]
Rep. Elijah Cummings [D-MD]
Rep. Philip English [R-PA]
Rep. Anna Eshoo [D-CA]
Rep. Rush Holt [D-NJ]
Rep. Walter Jones [R-NC]
Rep. Ric Keller [R-FL]
Rep. Ron Lewis [R-KY]
Rep. Carolyn McCarthy [D-NY]
Rep. Ronald Paul [R-TX]
Rep. Donald Payne [D-NJ]
Rep. Todd Platts [R-PA]
Rep. Jon Porter [R-NV]
Rep. Bennie Thompson [D-MS]
Cosponsorship information sometimes is out of date. Why?
Last Action: Apr 17, 2007: Referred to the House Committee on Ways and Means.
Full Text: View Full Text of Bill
This bill is identical to S. 1394 (Status: Introduced).
Other Bills with the Same Title
108th Congress: H.R. 666
109th Congress: H.R. 3458
Committee Assignments
This bill is in the first stage of the legislative process where the bill is considered in committee and may undergo significant changes in markup sessions. The bill has been referred to the following committees:
House Ways and Means
To cite this information, we recommend the following:
GovTrack.us. H.R. 1876--110th Congress (2007): To amend the Internal Revenue Code of 1986 to exclude from gross income of individual..., GovTrack.us (database of federal legislation) <http://www.govtrack.us/congress/bill.xpd?bill=h110-1876> (accessed Jul 25, 2007)
Because the government takes a day or two to post legislative information online, GovTrack is usually current as of the start of the previous day.
Thank you for responding
_________________
Frank Roccuzzo
Realty USA Southwest
[ Edited by commercialking on Date 07/25/2007 ]
I would definately consult a real estate lawyer.
You want to protect yourself and allow yourself an exit strategy. You may consider the ,assigns to, option which will give you the option of selling and or sub leasing and making money on the cash flow.
What terms and interest rate are at play here.
are you buying at future market value or present market vale?
The term no money down sounds tempting, but in the long run if you do not do your home work it will cost you dearly.