I have been renting a property for 2 years now and making rental payments directly to the mortgage company. The owner was in foreclosure but I helped the owner through the modification and now finally approved and modification papers signed. The owner has given me power of atty of real estate for the property. The owner is willing to totally walk away from the property and leave the mortgage in their name. What is the best way to secure the property. I cannot get a mortgage in my name at this time. Can I do a Quit Claim Deed or a Special Warranty Deed. What is my best options?
What you're talking about is buying "subject to". Do a search, there's a lot of discussion on this. There are risks, specifically the lender calling the loan because of the transfer. So, if you do this, work on cleaning up your credit so you can refi if the loan does get called.
Use a general warranty deed. It will have an exception for the loan that's being left in place. So will the title policy. Otherwise, this is a typical transaction. Not all title companies will do them, so you make have to call around to find one that will.
You may also want to consult with an attorney.
Joe I don't have a brunch experience nowhere near the amount of Jon H.. But I will say this.. Mortgage companies very seldom care who's actually making the mortgage payments. It's seems like you may have established some sort of rapport with them, I think it's highly unlikely that they will call the loan due and if they do I'm sure you'll be able to come to an agreement. Again they just want somebody to re-pay the loan. Per Jon H advise it is always good to consult with a attorney.
If you have a choice, which it seems that you do, please do not use a quit claim deed. You have no burning need to do so in this case and it could lead to having problems getting title insurance in the future when you refi or sell.
Also, when you talk to an attorney, don't just pick up the freaki' Yellow Pages. Look for a lawyer who works with real estate investors. Interview them to make sure they know what they are talking about. If you're not sure what to ask, post something and get an answer first. Not all attorneys, even real estate attorneys, know the in's and out's of the investor world.
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