TEXAS Subject To; Insurance Escrow/Homestead Exemption - Posted by Brandi_TX

Real Estate Investing
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Posted by TRandle on April 03, 2000 at 12:51:17:

BY,
What am I missing here? You’re merely “managing” the property for them, right? Unless there’s some occupancy requirement, I think this is a non-issue.

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TEXAS Subject To; Insurance Escrow/Homestead Exemption - Posted by Brandi_TX

Posted by Brandi_TX on April 03, 2000 at 09:15:55:

Looking for some TEXAS feedback on the following “Subject To” issue.

When the seller drops their homestead exemption, and the property taxes go up, the amount escrowed by the lender will no longer be enough come tax time.

I know any inquiries will come to me as Trustee, so how should this loss of the homestead exemption be explained to the lender if/when they ask?

Thanks,
Brandi_TX

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Re: TEXAS Subject To; Insurance Escrow/Homestead Exemption - Posted by Eric C

Posted by Eric C on April 03, 2000 at 13:48:53:

Hi Brandi -

What TRandle says is true, you are “managing” the property, aren’t you?

I used to have the seller send a letter to the lender that stated that “so-and-so”(me), a property management firm, would now be “handling” all issues having to do with the property and to please contact them with any and all questions.

I then coupled that letter with another (from me) on my letterhead that introduced myself and my firm to the lender. In it I confirmed that we were, indeed, in the business of managing property for individuals, institutions, and investors. I took the time to say that we would be happy to answer any questions that they (the lender) might have regarding the property AND I ASKED FOR MORE BUSINESS FROM THEM. (the lender)

Now, it’s no big deal about the loss of the property tax exemption. In fact, they expect it.

So, the short answer is, do it in advance and do it on purpose. Don’t let yourself get surprised.

Good luck,

Eric C