Performance Mortgage...... - Posted by David Alexander

Posted by Joseph Madera on December 15, 2000 at 07:49:30:

What is a performance mtg?

Performance Mortgage… - Posted by David Alexander

Posted by David Alexander on December 14, 2000 at 15:38:54:

Not that I’m one to worry to much about the DOS Jail, but I have a question.

Can you put a performance mortgage in place, or any second mortgage in place for that matter if you have bought a property Subject to?

I mean the payors wouldnt be there to sign on a note it would only be your new payor.

With that said the reason I ask is because I have a deal where there is virtually No Equity. Don’t really want to wrap it just want to assign it, pick up some cash and a note.

I can’t see how I could secure the note to the property withought throwing up Huge In Your Face flags, because it would be the new payors signing the note and Deed of trust.

Any thoughts??

David Alexander

Re: Performance Mortgage… - Posted by Bud Branstetter

Posted by Bud Branstetter on December 15, 2000 at 12:13:02:

If you violate the DOS clause by not leaving the original owners owning part of the trust, I guess it doesn’t matter if you have the trust create that 2nd. Although you have put on public record a notice the mortgage company is unlikely to pick it up.

You know that I would do it in a PACtrust. In that beneficialy agreement you sell the new resident(beneficiary) a piece of the trust. You still get an amount equal to that equity you would normally take back. You collect when the property is refi’d/sold.

Re: Performance Mortgage… - Posted by JPiper

Posted by JPiper on December 14, 2000 at 16:04:48:

The way I would handle this is to have the property deeded to a trust. Now have the trust enter into a second mortgage in favor of you or a new entity. When you later assign the beneficial interest in the trust to the new buyer, you will still hold the second…which will give you a way back into the property should the buyer default. Of course the note is in the name of the trust, not the new buyer. You could have the new buyer execute a personal guarantee.

JPiper

Re: Performance Mortgage… - Posted by David Alexander

Posted by David Alexander on December 14, 2000 at 16:20:04:

Have you ever done any this way? I guess performance mortgages only real place are when your trying to make a seller perform, not your buyer.

As far as my deal I would definitely go ahead and make them sign as a personal guarantee also.

I was just looking for what you said a way back into the property in the event they defaulted.

David Alexander

Re: Performance Mortgage… - Posted by JPiper

Posted by JPiper on December 14, 2000 at 16:30:40:

I’ve carried alot of seconds whose main purpose was to get the property back in the event of a default…just not seconds combined with the trust. I might add that I hear you could assign the beneficial interest and secure it with a UCC filing. I don’t know much about this…but my understanding is that it gets the beneficial interest back…the property is still titled in the name of the trust.

JPiper