How do Subject To Offers work for the seller? Won't the loan be called due?

[Arron Paulino]

Does someone mind explaining subject to offers? I ask as I have received offers from buyers that want to do an assumption of the current mortgage via trust acquisition and provide a down payment due to the seller. The terms would be a 30-day closing with a 10-day inspection period. 

Another offer is asking for owner finance for 84 months with monthly payments due to seller. Wouldn't the loan be able to be called due in this case or is there a loophole? Is there any way of reducing closing costs? Anything I should be aware of and counter with if needed? 

[Jay Hinrichs]

Quote from @Rick Albert:

So I don't really have experience in this but I recently got an offer on one of my listings with a subject to and spoke with my broker who was in the mortgage space for about 30 years.

You are correct, if the lender finds out, they will call the loan. My broker also received a few subject to offers and when looked them up in public records on other properties he say Notice of Defaults. Basically the concern is they tie up the property, collect enough rents to make a little bit, and then just default. I'm saying that's what's happening and I'm sure there are some legit ones out there.

The offer I got I called the number and it wouldn't go to anyone. It screamed sketchy. To be honest as a broker I'm not sure we can really suggest accepting these types of offers given the high risk potential. It would need to be a savvy Seller to agree to this.

you would be nuts to advise your clients to do a sub too.. WRAP with a AITD that can work but  a straight sub to no way.. CA has the AITD  and its a robust  debt instrument that is designed for these transactions.