subject to and death - Posted by MrWi

Posted by Lydia on March 11, 2006 at 19:18:29:

You’re right. It’s no skin off the investor’s nose if the deal falls apart down the road, since he is not personally liable on the loan. There really isn’t any way it can blow up in his face. I keep thinking that if I take a Sub 2, I am morally obligated to make the payments, no matter what, but if the seller doesn’t keep their end of the bargain, for whatever reason, it would let the buyer “off the hook”.

subject to and death - Posted by MrWi

Posted by MrWi on March 11, 2006 at 02:07:11:

I have been approached with a rather unique subject to situation. A cancer patient who has been given two years to live by the doctor is looking for someone to step in and take over the payments on the house they are currently living in and allow them to stay in the home until they expire. They are willing to give up the deed now as long as there is a written agreement that they can stay in the home. There is approximately $60,000 in equity, however, they do not want the bank to get the house when they pass, and are not to interested in doing a reverse mortgage. My thought is to step in, have them refi the house, pull out 2 years of cash, put the cash into escrow and make the payments from there and I get the deed. Then when they pass, I would get the house, But here is the question. Should they pass, can I keep the loan in place??? and just keep making the payments???

Run don’t Walk This is Crazy! - Posted by Equity Hunter

Posted by Equity Hunter on March 11, 2006 at 23:00:30:

I can’t believe I’m reading this. This is a crazy deal. You have all the liability. You’re making the payments and are hamstrung to keep this person in the house regardless? They could live forever. Come on. Wake up.

Offer some $ to get them out. Or walk. Or put them on a lease at least. Jeez.

Re: subject to and death - Posted by Lydia Hubbell

Posted by Lydia Hubbell on March 11, 2006 at 08:02:25:

No doctor can determine how long a person will live. My uncle was diagnosed with Lou Gehrig’s disease 8 years ago and was “given” 2 years to live. He’s still alive, and not in any worse shape than he was in 3 or 4 years ago.

Are these people planning on paying rent while they live there? What happens if they are financially ruined due to medical bills and can’t pay rent? If they refinance and pull equity out, that means higher payments for you to make, doesn’t it? Can you do that?

I’d be VERY careful.


Re: subject to and death - Posted by gerald

Posted by gerald on March 11, 2006 at 03:08:24:

Sounds like a pretty good plan to me if the seller will cooperate and do his part.

As long as you have the deed, make the payments, and nobody tells the mortgage co. I can’t see why not. The only thing I would be antsy about is dealing with the heirs, to make sure they understand completely and don’t try to stir up things.


you didn’t read the post - Posted by jake

Posted by jake on March 11, 2006 at 23:10:32:

you are not making payments, they are paid out of escrow. Nor do you have any liability. Read the post.

Re: subject to and death - Posted by george

Posted by george on March 11, 2006 at 16:03:27:

That’s really not an issue, Lydia. All that has to be included in the agreement is that if the escrow is exhausted the seller will pay rent. If the seller doesn’t, there is no out of pocket, so Mr Wi can always walk with no hassle, the loan is still in the seller’s name.

Nothing to “be careful” about.


This is still a crazy deal - Posted by Equity Hunter

Posted by Equity Hunter on March 12, 2006 at 17:35:31:

No matter how you look at it. It’s crazy for the the owner. Where is the benefit? He is going to get a new mtg (hopefully) and he is going to make the payments for two yrs and then our investor friend gets title when he dies hopefully in two years. The sooner the better.

The owner said he didn’t want the bank to get it. What guarantee does he get from our investor that won’t happen? What happens if he lives longer than 2 yrs.? Our investor friend is not obligated to make the payments right?

This is a stupid idea. And I think it’s trying to take advantage of a situation. This deal will NEVER happen in it’s present form. Obviously the cancer has gotten into his brain. A case could be made for mental incompetence.

So it’s just so much talk at this point. It’s a frivilous stupid idea. Dream on.