"Subject To" Financing,
Would like some input on acquiring properties with "subject to" financing. Has anybody had a bad experience with lender activating the due on sale clause after acquiring a property in this manner. It seems to me that if interest rates climb, lenders may be more inclined to call the loan due and possibly rewrite the loan. Any input would be greatly appreciated. Thanks, Mark.
MarkTracy,
Glad to meet you.
I was just envisioning a corporate meeting at a major lending institution.
The young executive stands up and says, "I think we should start calling all the loans due where the the title has transferred, even though we have hundreds of thousands of foreclosures, we certainly can use some more properties so we can really lose or butts."
Or "let's wait for the interest rates to go up then start calling loans, even though we won't be able to sell the houses right away because of the higher interest rates once we get them back we, will just lose some more money."
I have never heard of a preforming loan being called by a lender to answer your question. I have read stories about loans being called, "Subject To investor operating a meth lab in his basement gets arrested and gets his loans called because he couldn't make the payments from jail."
You have the investor who puts up the money for the lender to loan out. The investor expects a return on their money, so the lender says to the investor we are going to call preforming loans because the seller transferred the property so you won't get any rate of return this year.
Mr. Investor says I think I will start doing Subject To deals with my money so I will have a return every year, all I have to do is stay away from lenders who want to lose money.
John $Cash$ Locke
The best advice I can give is purchase John Locke's Subject To Manual...I think it will help answer a lot of your questions. Good Luck!!
Mark,
The DOS is really a non issue. I have had many loans with many lenders including Countrywide who reportedly likes to call loans due and never so much as a wimper.
It is an option for the bank, not an absolute.
William Tingle
WilliamGA
Where can I get John Locke's Manuel to buy?
Look back a couple of posts and click on the shopping cart under John Locke's post.
At the top of the page is a tab titled Forums - go there - go to the Subject To forum.
See for example, the post titled Bank Threatening Foreclosure and the post titled Attorney General Troubles. The posts are listed maybe 50 to a page and you have to go back to prior pages to see them. There is a search feature.