Assume The First Mortgage?
If I was going to payoff a first mortgage, whether shorting it or not, why not assume the mortgage instead of satisfying it? Would the bank let you do this? Even if they agreed to a ss? Is there any difference for them?
This way I could continue with the foreclosure and not have to deal with any jr lien holders and eliminates any other lien suprises in the process.
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Swetbak[ Edited by swetbak on Date 10/31/2003 ]
I have had smaller banks allow me to assume their note and foreclosure position, but I have had no success with larger banks when it comes to that.
BAMZ
[addsig]
If you want to assume your seller's mortgage, the seller has to have assumable mortgage. Only assumable mortgages I know are VA and FHA, but of course, you have to be qualified to assume it.
Nope.
predicated upon a payoff... usually within 30 days.
terms of a short sale approval are ALWAYS (and I rarely say "always"
They might allow the assumption, but not both an assumption and a shortpay.
You could (if you had the cash) purchase the mortgage at a discount via an assignment, placing you into the shows as first mortgagee.
As first mortgagee, you could continue with the foreclosure process, but run the risk that the mortgagor files BNK, or otherwise thwarts your efforts.
swetbak,
Assuming the note and foreclsoure postion is certainly a viable option. As the post above said, the bank would not accept a short sale and then allow you to assume anything, they will want cash at that point.
It has worked for me because the first mortgage was a very low amount, and I paid them in full. Best of success!
BAMZ
[addsig]
What about paying off the amount in default, and taking the property "subject to"? this might make it easier to sell without worrying about seasoning issues.
I must clarify my original question. My phrasing was technically incorrect. I meant to ask about buying the mortgage from the first mortgage holder after agreeing on a discount (or not if they won't discount). That should explain the rest of the post. My apologies for the emphasis on "assume".
[addsig]
Absolutely. Efforts to purchase the mortgage (via an assignment) at a discount is mechanically similar to that of a short sale, but without the need for any input/permission from the mortgagor.
You should consult with both an attorney, and a CPA if this is your strategy. As mortgagee, you have certain responsibilities.
Thanks for the replies.
I already have the deed and the mortgagor isn't planning on BNK. In fact she is working very kindly with me. I am going to send the SS package to the bank this week. If I get an acceptance letter for the SS, do I just contact them back and say that I want to buy the mortgage at closing instead of satisfying it?
Sometimes I feel like I'm picking the details apart, but I'm trying to get the most out of this with the fewest mistakes.
[addsig]
be careful mate, if the tune changes a bankrupcy will kill you in some states.