If the Seller doesn't pay the mortgage on L/O?? - Posted by Steve Heller

Posted by Bud Branstetter on March 28, 1999 at 20:03:34:

When you do a L/O you can have the seller sign a mortage that you have an interest in the property. If they get a judgement against them or are otherwise unwilling to clear title you can foreclose to clear the title.

If the Seller doesn’t pay the mortgage on L/O?? - Posted by Steve Heller

Posted by Steve Heller on March 28, 1999 at 07:08:09:

Does anyone have a suggestion if the seller doesn’t pay his/her mortgage on a lease option and the property goes into foreclosure? This assuming I pay the seller on time and all payments are current.

Thanks All,

Steve Heller

Re: If the Seller doesn’t pay the mortgage on L/O?? - Posted by Laure

Posted by Laure on March 28, 1999 at 10:23:21:

Does the seller have a mortgage? I would check at the court house to see if he does. Then, get a third party escrow agent to handle the payments.

Laure :slight_smile:

Re: If the Seller doesn’t pay the mortgage on L/O?? - Posted by Bud Branstetter

Posted by Bud Branstetter on March 28, 1999 at 08:45:09:

I personally prefer to have the payments collected by a 3rd party. Hopefully someone I control. The second choice is to send the landlord a check made out to the mortgage company. BUT NEVER CASH.

If you had done a performance mortgage you could make up the back payments and foreclose on the performance mortgage. If you do neither there is an old saying about a fool and his money soon parting.

Re: If the Seller doesn’t pay the mortgage on L/O?? - Posted by DougO(NM)

Posted by DougO(NM) on March 28, 1999 at 07:40:34:

NOTE: You should take care of this up front. Your option should state that in the event the seller fails to make the mortgage payment, you have the right to do so and to deduct it from your option price or lease payments. You can do several things to protect yourself 1. pay the mortgage yourself 2. Set the deal up in escrow and have them pay it. Never send the money to the seller if they have very little or no equity coming out of the deal. If you are already involved in a l/o deal with the house being foreclosed as in the post, you should contact the lender and find out how much it will take to cure and pay up, and make sure your l/o agreement gives you the right to protect your posistion. Doug

Re: If the Seller doesn’t pay the mortgage on L/O?? - Posted by ScottE

Posted by ScottE on March 28, 1999 at 19:47:03:

Bud,
What is a performance mortgage?

Thanks

Scott

Re: If the Seller doesn’t pay the mortgage on L/O?? - Posted by Scott Bell

Posted by Scott Bell on March 28, 1999 at 08:11:58:

Heard a great Idea yesterday from Bernard Zick, put in your contract that you have the right to pay the mortgage, and if you ever need to make the mortgage payment, the seller will reimburse $3.00 for every $1.00 you spend. Having it credited to your down payment is a great idea.