Should we push to the banks that the renters, if they wish and are paying their rent, should be able to take over the mortgage?
That is an intriguing idea. If the bank were to take ownership following foreclosure, and determine it was rented, they could offer some process to qualify the renters and determine if they are interested.
The challenge is that the banks can't deal with the renters until the bank owns the house. Then once the bank does own the house, do they want to wait to qualify a tenant by checking credit, income, etc. and essentially write a new mortgage? They can't assign the existing mortgage to the tenants because the bank is now the owner of a property and the mortgage no longer exists because they finished foreclosure and wiped out that mortgage.
Legally, the owner would have to get permission for the bank to allow them to assign the mortgage to the renter before the foreclosure was finished. If banks offered that as an option, they might find more owners willing to take it, but the renters would have to show that they could pay the mortgage, taxes, and homeowners insurance.
No because a lot of loans have clauses forbidding this to happen. Some have assumption clauses that maybe they could assume the loan but if they rent and pay as much as a mortgage payment why would they be renting? If they rent its for a reason and they more then likely don't qualify for a loan. Maybe they just pay part of the loan and the owner pays the difference. But banks are not going to do that because you don't qualify the people before hand.
To many problems w/ this idea......if the renter could afford to buy, or have a dn payment, he wouldnt be renting to start with...........it would be bad for banks, and only compound the problem...........
You have a great idea..
If the renter is able to make up any deficiencies, and is able to pay the mortgage (not just the rent), here's what the renter can do prior to foreclosure:
Approach the owner. Say: "I understand that you may be having some difficulty paying the mortgage on your property. I'm sure you don't want to lose your property. And I don't want to lose the home I'm living in. I have a proposal that might work for both of us. You deed the house to me. I will begin making your mortgage payments. At some point in the future, I will sell the house or refinance it. At that point, you will be off the mortgage. In the meantime, you'll have protected your credit because I'll have made your mortgage payments. And I'll still have a place to live."
The tenant might agree to share in any appreciation with the owner, as well.
There are some risks involved. First, as the other comments note, such an arrangement violates the lender's due on sale (DOS) clause. Now, the DOS clause is not a law. You don't get thrown into jail for violating it. It's a provision in the mortgage that says that if the owner transfers all or a portion of the equitable interest in the property to someone else without the lender's approval, the lender can call the mortgage immediately due and payable.
But, hey: In today's market, which do you think a lender would rather do: (1) Sit back as someone clears up the mortgage arrearages and pays the mortgage on time every month, or (2) Foreclose on the original owner. Most lenders would eagerly choose (1). And besides, there are ways to disguise the transfer. Not illegal ways. Perfectly legal.
Worst case scenario for the original owner: After a few months, the tenant is no longer able to pay the mortgage and defaults. Eventually, the property is foreclosed upon. In that case, the owner isn't any worse off than he would have been earlier. So there's no greater downside risk.
That's how you can do it--legally and ethically--today.
Hope that helps.
0 ความคิดเห็น:
แสดงความคิดเห็น