Additional Questions About
Assignment of Mortgage Payment Sales
Can I stay in the property until it sells
Yes, it’s your property until you sell it. You are expected to stay in the property until a
buyer is found and the sale is completed, although you are not required to. When you
complete the sale, you move out.
Should I make the payments until the property is sold?
We would prefer to assign mortgage payments that are current. If you are behind, a
mortgage payment assignment may still be possible however, the more behind, the more a buyer would have to bring to closing to make the loan current and the less likely it will be that a buyer can be found
for the property. Also, as the loan goes
further into default, a foreclosure becomes possible.
Generally if you are not able to keep a loan going, WE CAN HELP by doing a short sale on your property. Often we can start a short sale and mortgage payment assignment program together (a COMBO PLAN) and if a buyer can’t be found in time for the mortgage
payment assignment program, we can fall back to the short sale to
try to avoid a
foreclosure. For more information contact us.
Are there other alternatives to doing a Mortgage Payment Assignment?
In general, if a property has little or no equity, the on
ly way to sell the property is to do a short sale or mortgage payment assignment. Otherwise you would have to bring
(potentially a lot of) money to the closing table in order to cover the closing costs, commissions, and payoff shortage. If the property has
some equity (typically more than 20%) a good alternative may be a
wrap around mortgage, which also allows the home to be sold with owner financing, and thus FASTER than through traditional methods.
Another alternative may be to offer the home on a lease /option (lease with an option to buy). Although this is not technically a solution for
the seller (the seller becomes a landlord for 3-5 years) and is not legal in all 50 states. If you don’t want to sell your property, you may consider negotiating a forbearance or loan modification agreement with your lender. These agreements generally allow a property owner to agree to a schedule to “make up” missed payments that resulted from a temporary interruption in income and/or reduce the payments going forward. If your situation is more permanent than temporary, you will likely not be approved for forbearance, in which case a short sale or mortgage payment assignment is probably your best option. Also, the majority of loan modifications are not approved by lenders and
many property owners that pursue this option ultimately end up in foreclosure.
How long does my name need to remain on the loan?
want to place a time limit on the loan you are assigning, you CAN put a balloon term on Until the buyer ultimately resells the home, refinances the loan or pays the loan off. If you
the loan, making the loan expire after 3, 4, or 5 years (or any amount of
time you desire) at which point the buyer will be required to refinance.
How does this program affect my credit?
mprove your credit.
assignment program, your payments will be brought current and this will generally It depends. If you are behind in making your payments and/or have a spotty payment history, at the time that a buyer buys the property, through the mortgage payment
For many sellers, as payments continue to be made monthly, and in a timely fashion, their
credit will continue to improve or remain unchanged. Obviously, if payments are late or
missed, your credit will decline. In most cases, although the loan(s) remains in your name
these loans are treated by the credit bureaus as cash neutral accounts (a debt with an offsetting credit). However, each
person is treated individually so check with someone you trust.
How do I know the payments are being made?
The best way to monitor the payments is to have a loan servicing company collect the
payment from the buyer and make the payment to the underlying lender(s) while sending
the buyer as well as you, the seller, a statement each month. We can arrange this
automatically as part of the closing for the mortgage payment assignment program. You can also usually check the status of the loan using your lender’s online system.
Will I make any money?
In most cases, if the property has little, no, or negative equity, there is no money to be made by the property owner.
In cases where the property has a significant amount of equity, the property owner may receive money through an alternative Assignment of Mortgage Payments strategy such as the wrap around mortgage sale or owner financing sale.
Will I have to pay anything?
One of the great benefits of this program is that most of the closing costs, assignment fees, and commissions (if any) are paid by the buyer.
Depending on the property, situation, and buyer’s resources, the property owner may or may not be asked to pay some closing costs. Typically, the seller will pay their portion of
the closing costs only. Also, the property is generally sold
and repairs are generally the responsibility of the buyer.
How long does this process take?
FAST! There is no guarantee, but normally 2-10 weeks, but it could be less than a week!
Most of this time is used showing the property to a list of buyers that have already been found that are looking for properties, yours, offered for sale with financing.
As with any sale, you can negotiate the closing date with the buyer.
As the seller, your name remains on the loan. For many, this technique is usually
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a better alternative to a short sale, traditional listing (where the seller will have to
bring money to the closing), foreclosure, etc. For many sellers, living in areas
where hundreds or even thousands of properties are available on the market,
the most valuable thing they have to offer a prospective buyer is the loan itself,
and the mortgage payment assignment program allows these sellers to sell—
and sell FAST!