From what I’ve seen and not my personal expereince, the buyer/investor brings the loan current after he gets the current owner to quit claim him the deed/title. The buyer/investor also negoitates with the lien holder to continue the payments as is until they can refinance. They can also go into forbearance and the lien hold can either puts the money owed on the end of the note and you start clean or they take extra payments onto the regular payment to make up the difference. That requires the home owner to sign a new promisory note and such.
I always recommend doing a title search first as I’ve seen many IRS liens make the it a bad investment. Of course if you can talk the IRS into releasing the lien, and they generally do once the person doesn’t own the property, then it’s a great deal. It just takes a few months.
I posted this on MNG but no one could give me a straight answer. I am hoping to get some help here, just on the title seasonging issue regarding buyer’s lenders in double closing. You will make my day.
A flip? You are going to have such a hard time that it won’t be funny.
Flips in the current climate of lending is BAD and 99% of lenders will not do them. Underwriting wants to see 12-24 month title chain, appraisers are now requried to put a 3 year sales history on appraisals (atleast here in my state) and with a lot of counties having deeds on line it’s easy to see who the owner is.
The lenders that don’t require seasoning limit LTV and want high scores and have high rates that I’ve found.
Posted by cani_2004 on October 09, 2003 at 12:39:40:
Thanks for the response. You’re right, full doc is required on those loans. I have found many lenders (northern CA) that do no seasoning loans, I just got a one year ARM. Since I go full doc and have good credit (700), my interest rate is 4.25% for jumbo loans (400K) for first year with no prepayment penalty. I plan to recommend my buyer to use same mortgage broker to get him the same rate,and I only deal with willing able buyer will pre-approved letters and a 2-3% downpayment. Same way as any retail seller/agent would sell their house in this county. I also built up my buyer database while finding deals. I don’t like to rush into deals, networking buyers does take longer but worthwhile for greater schemes.
Here is another question: on pre-foreclosure, if you need to close fast and on your own (no closing cost or escrow companies) how does everybody come up with funds that bring seller’s loan to current? Do you just use your own or partner’s? The amount is usually too small for any lender to consider doing loans on.