Can a person take over mortgage payments on a house about to be forclosed?

Answer 1

Well, you are gonna probably get some guys with legal leanings telling you no, but the real answer is yes, sorta. You see the current owner can deed their interest in the property over to you (if sell you the house - assuming they own it entirely) but this will be subsequent to the mortgage.

Put another way, they can sell you the house but the mortgage still has to be taken care of. Now the mortgage will have a "due on sale" clause in it saying it has to be paid in full if the property is sold. However, if you just made up any back payments and kept paying the mortgage, the bank may actually not even notice that the property was sold (this sounds dumb, but I've seen it written up in a real esate investment book - as in another real estate innvestor was describing how he would do this). Theoretically you could just pay the mortgage until it was paid off.

So, you can have the house deeded over to you. THe mortgage would then be due (to be paid off in full) but if you just kept paying the bank they might not notice and therefore you could essentially take over the mortgage payments.

Note that is this above scenario, the mortgage is still in the prior owners name so if you stopped paying the mortgage the bank would still foreclose on the house and take it back, but though you would lose the house your credit would not be hurt, the former owners credit would be hurt since the mortgage was with them.

I am not advising you do this, but it is workable. Of course if the bank did notice the change in owner they would then demand the mortgage be paid off, so this can be risky too.

Answer 2

The bull rooster is correct to a point. And here comes the legalisms. If you merely take over another's mortgage payments without proper paperwork, you are not entitled to any interest deductions for your income tax, since you are not legally obligated to make the payments. The mortgage holders are the ones obligated. Same goes for the property taxes if you don't manage to get the deed/title into your name.

Do you want title insurance in your name? If you're content without title insurance, you can get away with it. If you insist on title insurance, you won't find a firm which will issue title insurance under such an arrangement. It can be done, but you need to make sure you catch all the legalisms if you want it to work out properly for yourself.

Answer 3

I am very knowledgable in real estate investing and know all the tricks they talk about on those late night infomercials.

Legally this can be done if the loan is assumable, such as a VA loan. If it is assumable and depending on it's assumability, the lender might need to approve of it first.

If the loan is not assumable, you can also legally transfer property into a trust to disguise the owner (what the rich and famous do) and then transfer the trust to the buyer.

As others mentioned, if the loan is not assumable, the lender can invoke the "due on sale" clause if the property is sold or transferred. The only way the lender will learn of the sale or transfer is if the buyer records the deed.

Chances are, your buyer is trying to flip the property without using as little money possible out of his/her own pocket. You could also be a potential victim of something called "rental skimming". Whatever the case, be careful on anything that will relinquish your rights to the property while you're still responsible for its financing.

Feel free to e-mail me the specifics and I can see what game he/she is playing and what to watch out for. I'm guessing you can stay in the house and pay him/her a low rent. right? ;)

Regards

Answer 4

The bank won't care who is paying the mortgage as long as they get their money. The problem is that the "other" person won't be able to deduct the interest off their taxes since that loan is not their obligation. Furthermore you can't take the write-off either, because you are not paying it.

Answer 5

get yourself a good real estate attorney,you can take over the payments,but make sure that there are no other liens against house,or that the house is under different peoples names.

Answer 6

yes you can but you have to cure the dept.you must consult a real estate attorney to be safe.