Homeowner s Guide To Assignment of Mortgage Payments Sales

Transcription

1 Hmewner s Guide T Assignment f Mrtgage Payments Sales America s leading netwrk f nn-traditinal real estate authrities! Sellers that NEED TO SELL a prperty, but CANNOT AFFORD TO, because f the amunt wed, and/r the cnditin f the prperty, and the tugh real estate market, nw have a viable slutin: A NEW PROGRAM that allws sellers t assign mrtgage payments t a new buyer! Need t sell? We can help! We are part f a natinal netwrk f investrs and Realtrs that specialize in buying and selling prperties FAST using advanced, nn-traditinal, real estate techniques, such as Mrtgage Payment Assignment, that are squarely fcused n tday s market. This guide explains the Assignment f Mrtgage Payments Sale ptins and answers all f the cmmn, and nt s cmmn, questins that peple have. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 1

2 Disclaimer We are nt a lan mdificatin cmpany and DO NOT ffer lan mdificatin services r FOR FEE freclsure avidance services. We d nt advcate the use f lan mdificatin services because f their very lw success and very lw custmer satisfactin rates. "Infrmatin presented here is fr general educatinal purpses nly and is nt intended t apply t any given situatin. It is nt t be cnsidered t be legal r accunting advice, and n warranties f its crrectness r legality are made hereby. We d nt believe that the services we ffer cnstitute Mrtgage Assistance Relief Services (MARS) as that term is defined in the law and regulatins, hwever, in the abundance f cautin, the fllwing disclsures under the Act are given: IMPORTANT NOTICE WE ARE NOT ASSOCIATED WITH THE GOVERNMENT, AND OUR SERVICE IS NOT APPROVED BY THE GOVERNMENT OR YOUR LENDER. YOU MAY STOP DOING BUSINESS WITH US AT ANY TIME. YOU MAY ACCEPT OR REJECT THE OFFER WE OBTAIN FROM YOUR LENDER [OR SERVICER]. IF YOU REJECT THE OFFER, YOU DO NOT HAVE TO PAY US. IF YOU ACCEPT THE OFFER, YOU WILL HAVE TO PAY US _$0.00_ FOR OUR SERVICES. EVEN IF YOU ACCEPT THIS OFFER AND USE OUR SERVICE, YOUR LENDER MAY NOT AGREE TO CHANGE YOUR LOAN." Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 2

3 Assignment f Mrtgage Payments Sales Hmewner s Guide What is an Assignment f Mrtgage Payment Sale? The sale f a hme where the lan payment(s) are assigned t a buyer in exchange fr the deed (wnership). Althugh virtually n lans are assumable, anyne can make payments n anyne else s mrtgage, and as lng as thse payments are made, the lender will cnsider the lan t be perfrming. In an Assignment f Mrtgage Payment Sale, the buyer agrees t make payments n the seller s mrtgage(s) ging frward in exchange fr wnership f the prperty. What are Three Versins f an Assignment f Mrtgage Payment Sale? Mrtgage Payment Assignment existing mrtgage payments are assigned frm seller t buyer Wrap-Arund Mrtgage - new mrtgage is created and payments are assigned t buyer Lease/Optin Hme is sld thugh a Rent-T-Own prgram What is the Prfile f a Typical Assignment f Mrtgage Payment Seller? Has a difficult t sell hme due t the hme having little, n, r negative equity, r simply a hme that is hard t sell size, lcatin, market, etc. Needs t sell mre quickly than is typical using cnventinal list and wait methd Bught r built a new hme with a $0/dwn (r minimal dwn) mrtgage in an area that has nt appreciated Refinanced an existing hme, brrwing mst f the equity, in an area that has nt appreciated Bught a hme in an area that has seen significant price reductins Has suffered a divrce, lst jb, medical prblems, r ther financial hardship including any cmbinatin f an increase in expenses and/r decrease in incme Has a nn-wner ccupied investment prperty that is n lnger perfrming t generate psitive cash flw Has an Adjustable Rate Mrtgage (ARM) in which the payments have increased t an unaffrdable level Has had an increase in payment due t an escrw shrtage adjusted after tax increases, r an under-funded escrw frm the purchase f a new hme Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 3

4 What is an Assignment f Mrtgage Payment Sale Example? Current Appraised Prperty Value: $200,000 Existing lan(s) balance: $225,000, Payment: $1850/m PITI Payments n existing lan are assigned t a buyer using a Mrtgage Payment Assignment Buyer buys at sales price: $225,000, payment $1850/m PITI In this example, the prperty is transferred t an investr r buyer subject-t the existing lan(s) that the new wner is then respnsible fr making the payments n ($1850/m in this example). The sales price ($225,000 in this example) is the balance f the lan(s), which may even be a premium abve the current appraised prperty value ($200,000 in this example). Typically when a prperty is sld with financing, as in this example, it will sell faster and at a premium price, because the buyer is getting the financing. This is because lans are currently difficult t get fr millins f peple, and because in general, buyers are buying based mre n the terms f the lan (mnthly payment and mney needed at clsing) than the price f the prperty. Histrically prperties sld with wner financing, as in this example, sell faster and at a premium price. Nte: The price and lan payment culd be higher r lwer. This prgram wrks fr all priced prperties. In general, this wrks best fr prperties with little, n, r negative equity. What are the Benefits f an Assignment f Mrtgage Payment Sale? Allws a seller t sell a difficult t sell hme quickly (typically in weeks, nt mnths), regardless f whether the hme has little, n, r negative equity. Better than cnventinal alternatives Avids a freclsure in cases where hmewner can n lnger affrd a hme Better than Listing Because it des nt require seller t bring many thusands f dllars t clsing in cases where the hme has little, n, r negative equity Better than a Shrt Sale Because a shrt sale always destrys the seller s credit and very ften results in a freclsure anyway Better than Renting Because hme is actually SOLD, and the seller des nt have t wrry abut maintaining the hme ging frward Sale typically takes 2-6 weeks - we already have a database f MANY THOUSANDS f buyers lking t BUY quickly, thrugh this prgram Seller des nt have t pay real estate cmmissins (because mst f the clsing csts and fees are paid by the buyer) In summary, the advantage t selling a prperty thrugh an assignment mrtgage payment sale is that it will typically sell much FASTER and even at a premium sales price because it cmes with financing, even if the prperty is wrth less than the ttal amunt wed. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 4

5 What are the Disadvantages f Assignment f Mrtgage Payment Sales? Yur name stays n the lan The reasn that a buyer wants yur hme is because it cmes with financing! T make that happen, the existing lan(s) must be left in place. Buyer culd default n payments Althugh the buyer has been pre-qualified t have a required incme and depsit, and althugh the buyer will be buying the hme as a hme f their wn, there is always a pssibility that the buyer will smeday nt be able t make payments, and thus default. In this situatin, the seller wuld have the pprtunity t take the hme back thugh a freclsure r deed-in-lieu. Lender culd call the lan A lender reserves the right t call a lan due n a hme in which wnership has changed. That being said, it is highly unusual fr a lender t freclse n a hme fr which the payments are being made (less than 1% chance in ur experience). If a lender chses t call such a lan, the buyer wuld be required t refinance the lan. In summary, the disadvantage t selling a prperty thugh a mrtgage payment assignment sale is that the seller s name remains n the lan. It is smewhat analgus t having a seller c-sign fr a lan n behalf f a buyer. Obviusly this is nt as desirable as a nt having t remain n the lan, hwever, it is usually a better alternative t everything else: a shrt sale, traditinal listing (where the seller will have t bring mney t the clsing), freclsure, etc. Fr many sellers, living in areas where hundreds r thusands f prperties are available n the market, the mst valuable thing they have t ffer the marketplace, is their lan itself, and the assignment f mrtgage payment sale allws these sellers t sell, and t sell FAST. Obviusly, fr mst peple they wuld prefer t sell FAST and at a PREMIUM PRICE and withut leaving the lan in place. Unfrtunately, n such ptins exist. What are the Fees? Often nne! A key benefit f this prgram is that mst r all f the clsing csts, assignment fees, dwn payment, and cmmissins (if any) are paid by the buyer Depending n the hme, situatin, and buyer s resurces, the seller r may nt be asked t pay sme clsing csts. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 5

6 Hw d I Get Started? 1. Review this guide t answer all f yur questins abut Assignment f Mrtgage Payment ptins 2. We will generate all the necessary paperwrk fr yu, have yu sign a sales cntract s that the prcess can get started, and give yu a list f any additinal lender dcuments needed t create clsing dcuments 3. The sales cntract and prperty can then be marketed and/r ffered t prspective buyers NOTE: We already have a database f THOUSANDS f buyers lking fr prperties available with wner financing. In many cases we have a buyer already identified immediately! 4. When a buyer is fund, we will schedule the clsing with yu, the buyer, and ur lcal r natinal law firm 5. Clse, mve ut, mve n, and that s it! What Paperwrk is needed fr an Assignment f Mrtgage Payments Sale? We will generate a checklist f all paperwrk, as well as all frms required t sell yur hme. This checklist will include: Authrizatin t Release Lan Infrmatin Purchase Cntract Seller s Disclsure Pssible state specific disclsures Additinal dcuments we will need: Lan Infrmatin Prfile (see prfile frm, attached) Lan Number(s) Lan type(s): FHA/VA, Cnventinal, ARM Lan Terms: interest rate(s), balln r pre-payment clauses Apprximate lan balance(s) Amunt f lan arrearages (back payments - if any) Cpy f recent mrtgage statement(s) Cpy f riginal survey Cpy f Original Nte(s) and/r Deed(s) f Trust Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 6

7 What Services D We Perfrm? Crdinate with Seller Analyze the subject prperty fr eligibility int the Mrtgage Assignment Prgram r alternative prgrams Generate ne f mre OFFERS, n yur prperty, t get the prcess started Prvide Assignment f Mrtgage Payment Sale guide and instructins t seller Prvide all necessary cntracts, checklists, and paperwrk Cllect all paperwrk Prvide slutins fr unusual situatins (ur netwrk has dne ver 1,000 nntraditinal transactins such as these; we ve seen it all) Generate clsing dcuments with ur lcal and/r natinal law firm Crdinate the clsing Crdinate with Buyer Shw the buyer the prperty Prvide Assignment f Mrtgage Payment Sale guide and instructins Prvide all necessary cntracts, checklists, and paperwrk Prvide slutins fr unusual situatins (ur netwrk has dne ver 1,000 nntraditinal transactins such as these; we ve seen it all) Generate clsing dcuments with ur lcal and/r natinal law firm Crdinate the clsing Crdinate with the Lender(s) Submit Authrizatin t Release Lan Infrmatin and receive verbal cnfirmatin f receipt frm lender(s) Verify lan balances, arrearages (if any), escrw status, etc. Crdinate insurance cverage fr buyer Crdinate with Clsing Attrney (r title cmpany) Prvide cntracts, paperwrk, and dcumentatin cllected frm seller and buyer Crdinate the clsing Crdinate lan servicing ging frward We can arrange fr a lan servicing cmpany t cllect payments frm the buyer and make the underlying payments t the lender(s), while issuing mnthly and annual statements t the buyer, seller, credit bureaus, and IRS ging frward. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 7

8 Additinal Questins Abut Assignment f Mrtgage Payments Sales Can I stay in the prperty, until it sells? Yes, it s yur prperty until yu sell it. Yu are expected t stay in the prperty until a buyer is fund and the sale is cmpleted, althugh yu are nt required t. When yu cmplete the sale, yu mve ut. Shuld I make the payments until the prperty is sld? We wuld prefer t assign mrtgage payments that are current. If yu are behind, a mrtgage payment assignment may still be pssible hwever, the mre behind, the mre a buyer wuld have t bring t clsing t make the lan current and the less likely it will be that a buyer can be fund fr the prperty. Als, as the lan ges further int default, a freclsure becmes pssible. Generally if yu are nt able t keep a lan ging, WE CAN HELP by ding a shrt sale n yur prperty. Often we can start a shrt sale and mrtgage payment assignment prgram tgether (a COMBO PLAN) and if a buyer can t be fund in time fr the mrtgage payment assignment prgram, we can fall back t the shrt sale t try t avid a freclsure. Fr mre infrmatin cntact us. Are there ther alternatives t ding a Mrtgage Payment Assignment? In general, if a prperty has little r n equity, the nly way t sell the prperty is t d a shrt sale r mrtgage payment assignment. Otherwise yu wuld have t bring (ptentially a lt f) mney t the clsing table in rder t cver the clsing csts, cmmissins, and payff shrtage. If the prperty has sme equity (typically mre than 20%) a gd alternative may be a wrap-arund mrtgage, which als allws the hme t be sld with wner financing, and thus FASTER than thrugh traditinal methds. Anther alternative may be t ffer the hme n a lease/ptin (lease with an ptin t buy). Althugh this is nt technically a slutin fr the seller (the seller becmes a landlrd fr 3-5 years) and is nt legal in all 50 states. If yu dn t want t sell yur prperty, yu may cnsider negtiating a frbearance r lan mdificatin agreement with yur lender. These agreements generally allw a prperty wner t agree t a schedule t make up missed payments that resulted frm a temprary interruptin in incme and/r reduce the payments ging frward. If yur situatin is mre permanent than temprary, yu will likely nt be apprved fr frbearance, in which case a shrt sale r mrtgage payment assignment is prbably yur best ptin. Als, the majrity f lan mdificatins are nt apprved by lenders and many prperty wners that pursue this ptin ultimately end up in freclsure. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 8

9 Hw lng des my name need t remain n the lan? Until the buyer ultimately re-sells the hme, refinances the lan r pays the lan ff. If yu want t place a time limit n the lan yu are assigning, yu CAN put a balln term n the lan, making the lan expire after 3, 4, r 5 years (r any amunt f time yu desire) at which pint the buyer will be required t refinance. Hw des this prgram affect my credit? It depends. If yu are behind in making yur payments and/r have a sptty payment histry, at the time that a buyer buys the prperty, thrugh the mrtgage payment assignment prgram, yur payments will be brught current and this will generally imprve yur credit. Fr many sellers, as payments cntinue t be made mnthly, and in a timely fashin, their credit will cntinue t imprve r remain unchanged. Obviusly, if payments are late r missed, yur credit will decline. In mst cases, althugh the lan(s) remains in yur name, these lans are treated by the credit bureaus as cash neutral accunts (a debt with an ffsetting credit). Hwever, each persn is treated individually, s check with smene yu trust. Hw d I knw the payments are being made? The best way t mnitr the payments is t have a lan servicing cmpany cllect the payment frm the buyer and make the payment t the underlying lender(s) while sending the buyer as well as yu, the seller, a statement each mnth. We can arrange this autmatically as part f the clsing fr the mrtgage payment assignment prgram. Yu can als usually check the status f the lan using yur lender s nline system. Will I make any mney? In mst cases, if the prperty has little, n, r negative equity, there is n mney t be made by the prperty wner. In cases where the prperty has a significant amunt f equity, the prperty wner may receive mney thrugh an alternative Assignment f Mrtgage Payments strategy such as the wrap-arund mrtgage sale r wner financing sale. Will I have t pay anything? One f the great benefits f this prgram is that mst f the clsing csts, assignment fees, and cmmissins (if any) are paid by the buyer. Depending n the prperty, situatin, and buyer s resurces, the prperty wner may r may nt be asked t pay sme clsing csts. Typically, the seller will pay their prtin f the clsing csts nly. Als, the prperty is generally sld as-is and repairs are generally the respnsibility f the buyer. Hw lng des this prcess take? FAST! There is n guarantee, but nrmally 2-10 weeks, but it culd be less than a week! Mst f this time is used shwing the prperty t a list f buyers that have already been fund that are lking fr prperties, like yurs, ffered fr sale with financing. As with any sale, yu can negtiate the clsing date with the buyer. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 9

10 What are the dds f success? Gd! Of curse many factrs affect the dds f success mst ntably, wuld anyne want this prperty with this payment? It has always been true that ffering a prperty with financing, as is dne with the Assignment f Mrtgage Payment Prgram, allws a prperty wner t sell a prperty FASTER and with a higher lan balance than any ther methd f selling a prperty. What if the buyer stps making the payments? If payments are missed, yu have the right t freclse n the prperty and get it back. In mst cases it wuld be preferable, hwever, t call the buyer (r let the lan servicing cmpany d this) and try t reslve the situatin, by telling the buyer t deed the prperty back using a deed-in-lieu, s that a freclsure n them (and the destructin f their credit) is nt necessary. In all cases if there is truble with the buyer, CALL US and we will be happy t help reslve the prblem and/r get the prperty back s that we can quickly sell it again. What if the buyer trashes the prperty? The advantage f SELLING a prperty thrugh the Mrtgage Payment Assignment Prgram is that the buyers are actually buying the prperty and nt renting. In mst cases buyers have pride in prperty wnership and care mre fr the prperty than renters. Additinally, these buyers are bringing their hard earned mney t clsing when they buy. S unlike renters wh are just putting dwn a small depsit, the buyers have much mre skin in the game, in the frm f their dwn payment. They may even make substantial imprvements t the prperty after they buy it, as is the case with many hmewners. Finally, if yu threaten t freclse n a buyer, yu can als ften negtiate the terms under which the buyer will return the prperty t yu, in exchange fr yu treating them mre fairly in a freclsure prceeding. Fr example, yu can ffer t allw them t stay in the prperty fr an extra s many days in exchange fr them cleaning and makereadying the prperty fr a new buyer and deeding the prperty back t yu s that yu dn t have t freclse. Regardless f the cnditin f the prperty, it can always be ffered t a new buyer asis. What if I have multiple lans r liens against my prperty? N prblem. All lans/liens against a prperty can all be cnslidated and assigned t the buyer ging frward. If a lan servicing cmpany is used (we can arrange this), all f the underlying lans can be autmatically cmbined int a single new lan and escrw accunt n behalf f the buyer. If I can t affrd this prperty, shuld I declare bankruptcy? Sme peple facing payments n a mrtgage they cannt affrd cnsider bankruptcy as an alternative. The truth is that bankruptcy des nt prevent a prperty frm being freclsed n it just delays the prcess briefly. If selling the prperty thrugh the Mrtgage Payment Assignment Prgram (r a shrt sale) wuld leave yu financially slvent, it is prbably a far better alternative t bankruptcy. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 10

11 What happens if I d declare bankruptcy? A prperty cannt be sld r freclsed n (auctined) while in bankruptcy (Ch 7 & 13). When a prperty wner declares bankruptcy, the lender will file a mtin with the bankruptcy curt t have the prperty remved frm the bankruptcy s they can freclse. Bankruptcy is a cmmn strategy t avid freclsure, but the reality is: bankruptcy nly DELAYS the freclsure temprarily, and des nt prevent it. Fees and missed payments pile up during bankruptcy making freclsure mre likely and less preventable, which can usually leave prperty wners with a bankruptcy AND a freclsure n their credit. If a prperty wner s financial prblems can be mstly reslved by selling the prperty, a Mrtgage Payment Assignment Sale r shrt sale is ften a much better ptin than a bankruptcy. If bankruptcy is inevitable, timing the Mrtgage Payment Assignment sale r shrt sale with the bankruptcy is critical. It s ften better t d the sale first, r if that is nt pssible, t crdinate the sale during bankruptcy s that it can be started as sn as the prperty is remved frm the bankruptcy. We have experience wrking with bankruptcy attrneys while negtiating prperty wner s shrt sale r crdinating a mrtgage payment assignment sale. If yu are cnsidering a bankruptcy, we will need yur bankruptcy attrney s cntact infrmatin. What abut the interest deductin and the 1098 Interest statement I get every year? Yur lender will cntinue t issue a 1098 interest statement with yur name n it each year. Hwever, because yu are n lnger the wner f the prperty, and the ne paying the mrtgage, yu are n lnger entitled t take the interest deductin. The new buyer is entitled t take the interest deductin. Therefre, they will disregard yur 1098 statement and have their CPA generate a new ne fr them. If a lan servicing cmpany services the lan (we recmmend this and can arrange it), then a 1098 with the prper name n it will be generated and sent t the new buyer. Can I buy r rent anther prperty after selling using the Mrtgage Assignment Prgram? There is n rule that says yu can t have mre than ne mrtgage, and, fr example, mst landlrds have many mrtgages. If yur gal is t rent, having smene respnsible fr the payment f the mrtgage n yur last prperty will likely help yur credit situatin (versus the alternatives f a shrt sale r freclsure) and imprve yur ability t rent a hme. If yur gal is t buy anther prperty, yu may have t explain t yur new lender (when asked abut the ld lan still n yur credit reprt) that yu sld the prperty thrugh a Mrtgage Payment Assignment Prgram. In sme cases, the underwriter will ask the new buyer (r lan servicing cmpany) t send a brief letter verifying that the prperty was sld thrugh a Mrtgage Payment Assignment Prgram. Nte: in sme cases, althugh smene is making the payments n the lan, and the amunt f the payment cvers the expense f the payment, having the lan will affect yur debt t incme ratis. This can push sme buyers belw the current lending threshlds. Each individual is treated differently, and getting anther lan n a new prperty is certainly nt guaranteed. S yu ll need t check with a mrtgage banker t find ut hw yur individual situatin will be treated. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 11

12 Anther ptin, if yu wuld like t buy anther prperty, is t ask us t find yu a prperty that is als available thrugh the Mrtgage Payment Assignment Prgram. What kind f buyer will buy the prperty? Pssibly a persn with less than perfect credit, but with an incme sufficient t make the mnthly payments, and enugh up frnt cash necessary t pay mst f the fees and clsing csts assciated with the Mrtgage Payment Assignment Prgram. Pssibly a selfemplyed persn that can t get a cnventinal lan in the current lending envirnment. In sme cases a buyer with excellent credit and incme that simply can t get a lan because f current underwriting standards, r simply des nt want t put dwn the very high dwn payment required in the current lending envirnment. D my neighbrs have t knw I m selling my prperty? Nt necessarily. When a prperty is sld thrugh the Mrtgage Payment Assignment Prgram it is usually marketed t an existing list f pre-qualified buyers. If it s OK with yu, it is preferable t als put a Fr Sale sign in the yard. Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 12

13 Assignment f Mrtgage Payment Seller Prfile Please cmplete this frm s that we will have all f the infrmatin necessary t generate a cntract and clsing dcuments fr the sale f yur prperty. Nte: This frm is nt a cntract and des nt bligate either party t buy r sell a prperty. Tday s Date: Seller Infrmatin Name: Hw quickly wuld yu like t sell?: Preferred clsing date: Other Names n the Deed: Other Names n the Lan: Phne number: Alternate Number: Prperty Infrmatin Prperty Address: City: State: Zip: Cunty: Legal Descriptin (if knwn): Mrtgage Infrmatin 1st mrtgage servicer (lender name): Lan N. Lan Type: FHA VA Cnventinal Private ARM (Select One) Interest Rate: Apprximate balance: Date last payment made: 2nd mrtgage servicer (lender name): Lan N. Lan Type: FHA VA Cnventinal Private ARM (Select One) Interest Rate: Apprximate balance: Date last payment made: Other infrmatin: REALTOR /Investr Infrmatin Name: Phne number: Alternate Number: Assignment f Mrtgage Payments Sales - Guide fr Hmewners Lve American Hmes, LLC, Cpyright MMXI P a g e 13