Posted by Investor-Rama on July 18, 2003 at 24:45:27:
I asked a question below, no response, so I have another thing to add, maybe I can get some insight about this.
I am working with the same seller, and I have great credit. The seller is a mortgage broker, we want to start right away on a dump rehab.
I am going to get a no-doc loan in my name, and I can qualify to do so with little hassle. In the mean time, in order to please both parties, we were thinking of doing the following:
He wants the mortgage out of his name, and wont do a Warranty Deed. I dont want to do a Quit Claim, since he can get a 2nd or give someone else the same document, it is weak for my perspective. So in order to comprimise, and to get the project started, I am going to put a lien in the property in the ammt of the repair costs. I will record the lien and he is ok with it. Then when I get the loan in my name, I will remove it. Since it is recorded, this stops him from trying to side step me before the mortgage is in my name, but it also allows me to start the work, instead of stalling. Since the RE market will start to heat up in 1 month, it is important for me to get going, and finish the project, rather than delay until the loan is in my name.
We also batted back and forth about using a loan servicing company, me putting in funds for 4 months of payments etc, but he didnt want the potential problems of non payment, and me being the title holder.
Does this sound like a good way of doing this? That is why I asked if a “performance mortgage” would be good in this instance. I would like to have had some responses, but so it goes.
Thanks for anyones comments on this, it is a gray area for me and I need any insight I can get.
Thanks!