A legal question.

[Ken DiPietro]

To the experts here,

Perhaps asking for legal advice is inappropriate in this forum but if I could get an off-the-record opinion I would be deeply appreciative.

The scenario is this, if I were to locate a property owner who is in the process of being foreclosed on, offer pay off their overdue payments, take over their loan payments, and hand them some money to move with, am I opening myself up for any risk?

This arrangement would be made through an attorney and the title for the home would be held by the lawyer until such time as the loan was paid off when it would be deeded over to me.

The intent is to save the closing costs associated with a loan and hopefully pick up a loan where the bulk of my payment would be going towards the principal. This also means that this deal would be done privately without the lender's knowledge.

Thanks,

Ken

[Justin S.]

Ken-

Sounds like you are doing a sub2 transaction without the getting the deed immediately, which is not good for you.

Before you make any type of payments to the homeowners or to the banks. Get the deed in your name. Otherwise, there is nothing to have the homeowner say "thanks for bringing me current, but we are no longer interested in selling."

I'm not sure of your exit strategy, so explain that further. Also, do some searches on subject to investing and due on sale clause.

The bank will find out that title transfered when you put the insurance in your name. But, you brought the bank current so why would they exercise the due on sale clause? Its a risk, but a minimal one in my opinion.