Banks That Allow Assignment of Contract? 14 posts by 12 users

Posted: 05/05/2008 at 08:44PM

Anyone have any success in a bank allowing you/your investor to assign a contract? I have heard through the grapevine that Wachovia will allow it, but I don't know for sure. A local Realtor associate told me today that it is against federal banking law, but again I don't know if this is true or not. I have a current REO offer on the table with " and/or assigns" on it, but haven't gotten approval from bank yet. Anyone have any experience with this?

Posted: 05/06/2008 at 06:03AM

The whole assigning a contract (Subprime lender) mentallity is off the table

Fraudulent and or inflated appraisals and the likes created a sizeable chunk of what we are seeing as a whole in the housing crisis

I would seriously doubt Wachovia or any of the top tiered banks would still allow it

I am curious which " federal law" it is that dis-allows selling a contract?

There are certain situations in which the assignment must be in writing.

Assignment of wages
Assignment of any interest in real property
Assignment of choses of action worth over $5,000
Assignment as collateral for a loan or debt

But I've never heard of a federal statute outlawing assignments...

Posted: 05/06/2008 at 11:19AM

Here's the link,

http://forums.biggerpockets.com/viewtopic.php?t=18741

Posted: 07/12/2008 at 04:35PM

Shi'Mere, could you please share more information with forum readers on this?

Which bank allowed you to use the assignment phrase please?

What contingency did you use to back out when your buyer backed out?

And if the property was under contract, why were you expecting them to continue negotiating on price?

Thanks.

Posted: 07/16/2008 at 01:10PM

Why not just do a double closing? A little more cost then just an assignment but it accomplishes the same thing.

You could also amend your contract with the bank to add add your buyer to the contract. Close the deal and then quitclaim your interest after you close. I've added partners to my contracts after the contracts were accepted and haven't had a problem with that. As long as everything matches up between whats on the contract and who closes it then there's no problems and no fraud.

Sign a contract with your investor to sell your half interest contigent upon you two buying it in the first place and after closing sell the other investor your interest for whatever the agreed assignment fee would be and quitclaim out of your interest.

If you have a cash buyer let them bring the cash and secure them with a security deed to close the deal. Afterwards deed your interest over to the investor for the assignment fee.

I wouldn't ever do an assignment or double closing unless I knew 99.99% that my buyer would close, however if your buyer fails then delay closing a few days and just make sure you have plan B in place to buy the property yourself. Make sure you close before the deadline so you have time to put your plan B in place before the contract expires.

Just make sure you have a good attorney or title company and document everything.

There's all kinds of ways to structure deals.

Posted: 07/21/2008 at 09:41AM

I have had good luck with getting properties U/C in the name of an LLC and then selling the interest in that LLC. I buy an LLC for $50 on the Colorado Secretary of State website for each property that I wholesale. I've not had a bank refuse any of my contracts.

If you go down this road it would be a great idea to have some professionally drafted documents for the sale of the LLC.

- john

Posted: 08/03/2008 at 06:02PM

I'm finding most banks won't allow assignment of contracts these days, and while you can do a double close to get around this, if the other party (the ultimate buyer) is using any type of traditional financing, most banks won't finance through a double close because of the possible chain-of-title issues.

So, be careful trying to find a buyer if you're able to get the bank to allow you to assign...