Are you are a seller having trouble selling your property? I can guarantee you that a big part of the problem is that buyers in general are having a hard time getting financing. This is reducing your number of potential buyers. So why not eliminate the obstacle? Why not sell utilizing a lease-option or a wrap-around deed of trust or an assumption – with or without lender approval? Why make the buyer go get a new loan? Let the buyer use your loan.

In the old days almost all residential bank loans could be assumed or “wrapped around” or “taken subject to”.  Then in 1986 Congress passed the Garn St. Germain Act. The due-on-sale clause in paragraph 17 or 18 of your deed of trust became enforceable under federal law. Most real estate brokers are afraid to “go around” a due-on-sale clause. Most tell buyers they have to get financing so the seller can pay off his or her loan. However, seller financing can work, although it has to be done carefully and with full disclosure to all parties.

In a seller-financed deal the buyer makes monthly payments to a collection service. The collection service pays the lender in the seller’s name and keep a record of everything. The buyer will pay a reasonable down payment – sometimes even enough to pay for closing costs and commissions and maybe enough to cash out the seller’s equity in the property.

Bear in mind that VA and FHA loans are assumable, provided that the buyer proves credit worthiness by customary credit standards, which may be less strict than standards for new loans – because often the seller is not released from liability, which means the lender will have two parties liable to pay the mortgage.

If you are a broker working on a deal where the seller is willing to “carry a contract”, don’t be shy about calling.

Click here to sign up for my email list.

James Robert Deal, Broker and Attorney
Broker with Agency One Realty LLC
WSBA # 8103, DOL # 39666
425-774-6611, 888-999-2022
James at James Deal dot com

 

Brook

Brook

Build your own home, custom construction, on this $530,000 lot, 1.75 acres in size. The property at 13931 Cascadian Way is 152 feet wide and 499 feet deep. It is 75,840 square feet in size. The property features a private meadow, a private forest, and a private brook. You can hear the brook from your bedroom window.

The Foreclosure Train Rolls On

The Foreclosure Train Rolls On

Private corporations such as Loan Star and Caliber bought thousands of mortgages. The government pays them to modify mortgages, but they are quick to foreclose. They invest in high value instead of low value homes. They should be required to serve the interest of the local neighborhood as are banks. They should be regulated as banks.

Jarjour Listing

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Lease-Option Deals Open Doors

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LEASE-OPTION AND LEASE PURCHASE DEALS A lease-option or lease-purchase deal is a form of seller financing.  With the lease-option deal, title stays in the seller until the buyer refinances or resells or otherwise pays off the seller. The wrap-around deed of trust deal...

Zombie Foreclosures

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CFPB: Zombie foreclosures hurt borrowers The Consumer Financial Protection Bureau is keeping an eye on “zombie” foreclosures, which it worries cause “direct borrower harm,” according to a CFPB executive. Zombie foreclosures occur when a bank starts the foreclosure...

New Federal Rules on Foreclosure

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New Federal Rules on Foreclosure —By Erika Eichelberger - Thanks to Mother Jones On Thursday, the Consumer Financial Protection Bureau, the federal consumer watchdog set up by the Dodd-Frank financial reform bill, announced a new set of foreclosure-prevention...

Washington MERS Suits Fail

Judges Dismiss MERS Suits By Evan Nemeroff Two borrower-initiated lawsuits alleging that the Mortgage Electronic Registration Systems role in the plaintiffs' deeds of trust caused them injury were both dismissed by federal judges in the Western District of Washington...

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Deceptive Practices in Foreclosures Thanks to the New York Times September 13, 2013  In early 2012 when five big banks settled with state and federal officials over widespread foreclosure abuses, flagrant violations — including the seizure of homes without due process...

More Foreclosures Coming

Where is the housing market going in 2013? Thanks to CBS News   (MoneyWatch) The housing market in 2013 stands on a precipice. While there is hope that the slow, but real, housing recovery that took hold last year will continue, fear remains that a sudden economic dip...

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The latest foreclosure horror: the zombie title By Michelle Conlin  Thanks to Reuters. COLUMBUS, Ohio | Thu Jan 10, 2013 1:58pm EST (Reuters) - Joseph Keller doesn't expect he'll live to see the end of 2013. He blames the house at 190 Avondale Avenue. Five years ago,...

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Foreclosure and Its Income Tax Consequences (TheNicheReport) — In a recent issue of The Niche Report I wrote an article on how to safely “walk away” from your mortgage. That article discussed consumer protection statutes, enacted by such states as California, known to...

Romney on Foreclosures – Bring Them On

November 26, 2011    -    New York Times Mr. Romney on Foreclosures Since the housing bubble began to burst six years ago, prices nationwide have fallen by a third. Nearly $7 trillion of home equity has been wiped out. Currently, some 14.7 million homeowners owe $700...

How does creative financing work?

How does creative financing work?

March 27, 2011 Today I got this email from Teresa, a real estate broker: James, I have a buyer with a good down payment. They make good money, but they are self-employed, have less than perfect credit, and are having problems getting financing. They have been looking...

Creative Financing – Seller Financing

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SELLER FINANCING IS A FORM OF CREATIVE FINANCING I would like to say a few words about creative financing, also referred to  as seller-financing, or a wrap-around deed of trust deal, or a lease-option deal.  Creative financing includes seller financing, but it is a...

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