Property lien in exchange for mortgage payments?

Question

I’m assuming the legality of this varies from state to state, or province to province (for our Canadian friends) but does anyone have any experience with paying down someone’s loan while in financial distress in exchange for putting a lien on the property?

Account Closed · Answer

Very bad idea. No good deed goes unpunished and the first homeowner to complain to an attorney will get you in position to learn about parts of the law you had no idea existed.

It may be legal, but it looks suspicious (even though you haven't done anything wrong) and if it looks suspicious, they look at everything your hand has touched.

I'm curious though how you think that might be a good business model?

Ned Carey · Answer

@Adam Castelsky I don't have any experience because I would not do it. It is pretty risky. Like Mike M said if anything goes wrong you will look like the bad guy.

Like Account Closed I don't see how you make money here.

Ron S. · Answer

I'm with Mike M.. Taking title to a homeowner's property could be the smoking gun needed to allege and prove an improper act on your part. Many states prohibit taking title to a property in exchange for "helping them out", with both civil and criminal penalties. At the end of the day, you aren't helping them out, you are helping yourself out by taking the equity out of the property. That would be a lot more foolish that taking a junior lien position...

Jess Kinzel · Answer

Do you happen to follow Clever Investor?

Minna Reid · Answer

Going into a junior lien position on a property where the owner doesn’t like to pay the first sounds like a foolish choice. If anything take title to the property.

Property lien in exchange for mortgage payments?

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