Updated almost 4 years ago on . Most recent reply
Due On Sale Insurance and Subject To Servicing
On the BiggerPockets podcast episode 527, Pace Morby explained that there are companies that provide "Due on Sale Clause" insurance. I've Googled a bit, but can't seem to find any further information or providers of this. Does anyone have experience with something like this?
In the same episode, Pace explained that in a subject-to purchase, you can have a service company collect the payments, and in that way the seller's DTI could be relieved of the subject-to payment amount. Can anyone point me in the right direction for this kind of service provider?
I'd love the chance to talk to somebody with experience with any of these tools and strategies.
Most Popular Reply
@Matt Huber the company he references is not an insurance company. I forget the name, but the company website was horrible. Half the pages where "coming soon" content. I would steer clear of that company. They seem to be peddling a service that you either don't need or wouldn't cover you if there was a problem. As @Jason Bott mentioned, insurance will not cover you for intentional acts, which in this case is the seller violating their mortgage contract. Odds are good as long as the payments are being made, the bank will not foreclose. Keep in mind that foreclosures result in banks loosing money, so they will avoid it if possible. A due on sale clause is enforced at the banks discretion and generally only if they see financial benefit. If you are doing subject to, make sure you have financing options as a backup plan. There are options out there.