Bank won't give payoff statement. Seller financing seller MIA

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Bank won't give payoff statement. Seller financing seller MIA

Dallin Wood
Member since 2020 · 2 posts · 0 votes

We purchased a home wholesale in August 2019. Instead of using hard money we assumed the sellers financing and had the seller taken off title and had ourselves added.  We had the property ready to sell And had a buyer and a closing date.  

The previous sellers went MIA after we bought the home. The loan is with Cenlar and everything is current as we are paying the loan.  The previous seller (Ioan holder) filed bankruptcy (chapter 13) in November 2019.  We sent in the authorized payoff letter we got at closing and the bank will not send the letter.   They won't talk to us as the loan is not in our name and we can't find the previous seller.  We failed to close (had to pay 3k to buyer) and are now stuck in limbo.

What can we do?

We don't want to hold this property because it is too far away and me to cash out to get a property closer to our other holdings. 

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
6y

Okay, to use correct terminology....you didn’t ”assume” the loan (a specific process where you apply and qualify for the existing loan, the seller is removed from the Loan, and you replace them).  You bought “subject to”, leaving the loan in place, in the seller’s name.  
When you do this, you need to an authorization form from the seller giving you rights to deal with the loan.

Not sure how get Cenlar to give the payoff but if you have sellers info, DOB and last 4 digits of SS#, you could get it online probably.  

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    Okay, to use correct terminology....you didn’t ”assume” the loan (a specific process where you apply and qualify for the existing loan, the seller is removed from the Loan, and you replace them).  You bought “subject to”, leaving the loan in place, in the seller’s name.  
    When you do this, you need to an authorization form from the seller giving you rights to deal with the loan.

    Not sure how get Cenlar to give the payoff but if you have sellers info, DOB and last 4 digits of SS#, you could get it online probably.  

    2Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    "The loan is with Cenlar and everything is current as we are paying the loan."

    Welcome to seller financing.  Call an atty, I think the bank doesn't care who pays off the loan, but they have privacy issues releasing info.

    Word of advice for buyers with seller financing, YOU NEED NOTICE FROM THE SELLER HE"S CURRENT ON THE MORTGAGE EVERY MONTH!!!

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  • Roman M.
    Investor · Miami Beach, FL · Member since 2016 · 486 posts · 216 votes
    6y

    I used to have a mortgage with Cenlar. From what i recall the title company got the payoff letter and they only needed my SSN or last 4 digits. 

    I am sure that when you bought the property, your title company has sellers SSN as they need it to file 1099 on the sale of the property. Additionally if prior owner filed BK then their SSN goes on BK filing. An attorney can pull BK filing through pacer service and probably get his info as well as his current contact info or his BK attorney info.

    1Reply
  • Andy Mirza
    Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    @Dallin Wood Your title company or escrow company really should have been able to get that payoff for you. That's what they do and good ones will know the little tricks to get them. As others have pointed out, some servicers will let you get a payoff online or by phone with just the loan number and borrower's SSN. 

    The BK may complicate things because the loan should be listed on the debtor's BK schedule. However, this really shouldn't be your problem.

    I would find a different title or escrow company that can get the payoff for you. 

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  • Ron S.
    Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
    6y

    You did an "assumption" (You didn't really) in violation of the terms of the borrower's note, and now are complaining about lack of cooperation from the lender? The lender has no obligation to you. If you can't find the seller, you have no legal recourse. You are lucky they aren't foreclosing on you (Whether you are current or not and yes, they can). Authorized payoff letter? Authorized by who? You? You aren't authorized to demand a payoff letter. Only the debtor is.

    Anything else you do that has been suggested could be fraud if you go on line, use the borrower's social security (or last 4 digits), or signed their name, or attested that you have the right to the information (you don't). You aren't the borrower. You have nothing from the borrower designating you as their agent. You have no rights to anything here.

    Maybe you can get an attorney to file some motion with some sympathetic court to show you were harmed by the seller in some way. Maybe.

    This is a clear example of why "Subject To" works most of the time, until it doesn't.

    2Reply
  • Ron S.
    Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
    6y
    Originally posted by @Wayne Brooks:

    Okay, to use correct terminology....you didn’t ”assume” the loan (a specific process where you apply and qualify for the existing loan, the seller is removed from the Loan, and you replace them).  You bought “subject to”, leaving the loan in place, in the seller’s name.  
    When you do this, you need to an authorization form from the seller giving you rights to deal with the loan.

    Not sure how get Cenlar to give the payoff but if you have sellers info, DOB and last 4 digits of SS#, you could get it online probably.  

     you could but...you'd be committing fraud doing so.

    1Reply
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