Sub2 From An Estate Handler
I just started working with a guy who's parents have passed away and he has been put in charge of handling their estate. He has already spoken with the lender and told them he wont be able to afford the payments. The numbers on this work to do a sub2. Can I do a sub2 on this? Will the mortgage stay in his deceased parents names? How does the lender handle this? Anything I need to be careful of with this one?
Thanks
The property must go through succession. If ownership of the property is going to the guy who your working with then you should have no problem in taking sub2.
How long does this process normally take? Does the title transfer to the son first? Is he now liable for the loan?
Anyone know the answers to these??
Attn Mr John Locke??
21,
Glad to meet you.
There is a legal process to transfer legal title from the deceased’s owners names to his or her beneficiaries or heirs.
Most states also allow a limited amount of several types of property to pass to certain beneficiaries free of probate, or through a simplified probate procedure.
I am not familiar with the law enough in PA to know what probate proceedure that would transfer title to the son.
However he needs to get the title transferred to his name, by what ever legal process before I would take the property over Subject To.
The due diligence on this one will be quite extensive, such as did the parents have any liens or judgements or money owed upon their demise, whereas transfer of the title to the son would be free of liens or encumbrances other than the mortgage. You should require the son to get title insurance on this property and see a copy of the title report after title transfer.
A copy of the courts assignment to the son should be sent to the lender, I see no problem with the lender not accepting this, but the son will be covered as disclosure has been made.
This also benefits you from a standpoint if this is unacceptable to the lender you will be appraised fo this fact.
As far as the timeline this again depends on the court system, normally they act fast when real property is involved, such as in the situation you have described.
Even though he notified the lender that he is unable to make payments, it would not discourage me, do to the fact that he could now state he is able to make the payments and title has transferred to him.
As always since this is a Legal and Subject To question, so my advice is from a Subject To perspective. Clean title then take the deed.
John $Cash$ Locke
[addsig]
Thanks for all the info John. You've helped clarify what I was looking for!