Posted by Nate(DC) on September 24, 2003 at 17:02:58:
Also - the Farmers Home / Rural Development programs can be equally strict.
NT
BILL B. - “Subject to” being called due - Posted by Jeff Bliven - CA2TN
Posted by Jeff Bliven - CA2TN on September 23, 2003 at 22:53:18:
Bill, long time no talk to!
We took over a small home, subject to the 1st and only TD.
Set up the trust, deeded it over, got ALL the great paperwork signed off, ALL the authorizations…
Contacted the Mortgage holder to start sending the payment coupons to the “Management Co.”, and low & behold… they are in the process of CALLING THE LOAN DUE!!
Apparently this loan was/is backed by an agency that helps/helped First-Time home buyers! And apparently, if at any time during the 30-years it is NOT owner-occupied… they have the right to call it due??
Hears the KICKER… This loan is 13 years old!!
Interest rate on it is at 7.75%, balance is only $29,000!!
They wasted NO time in notifying us either? within 4 days we had a letter from them!!
DO YOU BELIEVE THAT??
Bill, if you have any NEW words of wisdom for me… I’d love to hear it about now!!
TIA,
Jeff Bliven ? CA2TN
President, Knoxville Real Estate Investors Group
CRE_Stuff@WeBuyTN.com
for Bronchick - Posted by teresa
Posted by teresa on October 04, 2003 at 21:53:20:
hi,
when taking a property subject to exisiting loan, how do i find out if the property have a city sponsored or agency sponsored loan attached? I understand that those type of loan will surely accelerate the dos clause.
Re: BILL B. - - Posted by zach
Posted by zach on October 02, 2003 at 01:54:06:
Was wondering why you couldn’t use a hard money lender to just pay the loan off and then flip it right away?
Not surpised… - Posted by William Bronchick
Posted by William Bronchick on September 24, 2003 at 23:16:07:
This loan is into the principal payments now, which gives them incentive to call it.
I’ve heard of a few city-sponsored loan programs tend to call loans due. In Colorado, the Colorado Housing and Finance Authority (“CHAFA”) will do it.
The bottom line is that while it is very rare for loans to be called, it’s a risk we all take!
Re: BILL B. - - Posted by Bill H
Posted by Bill H on September 24, 2003 at 20:54:27:
Jeff:
If it is a USDA Rural Housing Loan you are in for some more surprises…like forgiven interest, reduced payments to be made up, etc… Had one and finally passed on it after my $35K deal got up over $75K.
Good Luck,
Bill H
Re: BILL B. - Posted by Nate(DC)
Posted by Nate(DC) on September 24, 2003 at 17:02:35:
Words of wisdom from a non-lawyer:
-
Check this BEFORE taking it “subject to” - all of these state programs are VERY strict about this.
-
Refi! Fast!
Good luck,
NT
Re: BILL B. - - Posted by JD
Posted by JD on September 26, 2003 at 10:58:44:
I was thinking the same thing. I have seen many a good foreclosure deal foiled by the dreaded Farmer’s Home Administration “interest recapture formula”.