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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Doing a "subject to" transaction without any untoward notice.. Posted by Ward-CA- on May 09, 2002 at 6:33 AM In Reply to: payments on a posted by Gonzalo on May 08, 2002 at 8:45 AM : Ward, : What is the common arrangement when making monthly payments on a "subject to existing loan"? Does the one who bought make the payments payable to the one who sold, and he one who sold makes the payments to the bank? Or does the one who bought make the payments directly to the bank? If so, then how do you prevent the bank from being suspecious about a change of title, since they are going to be getting cheks with somebody eleses name? : Thanks! : Gonzalo =•=•=•=•=•=•=•=•=•=•= Gonzalo, Generally the buyer makes the payments on the existing financing directly to the lenders rather than routing them through the original borrower. Banks actually don’t look at the thousands of individual checks streaming into their coffers every day of the month—they just don’t have the time nor inclination. All checks are processed by machines which are focused on the magnetic codes, payment amount and loan number. Lenders almost universally find out about a “subject to” situation because of the notification they receive that there’s been a change in the insurance coverage that shifts it from the old owner to the new owner. So the wise guys camouflage the insurance change by one of two ways. One is by getting their insurance agent to send in a new policy in the old owner’s name, but holding in their office file a “contract for deed” rider showing the owner’s equity in the new buyer’s name. The other way is by making the transfer from buyer to seller look like a transfer to the seller’s living trust and then buying the beneficial interest in the trust. This approach seems to work beautifully. Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, : : What is the common arrangement when making monthly payments on a "subject to existing loan"? Does the one who bought make the payments payable to the one who sold, and he one who sold makes the payments to the bank? Or does the one who bought make the payments directly to the bank? If so, then how do you prevent the bank from being suspecious about a change of title, since they are going to be getting cheks with somebody eleses name? : : Thanks! : : Gonzalo : =•=•=•=•=•=•=•=•=•=•= : Gonzalo, : Generally the buyer makes the payments on the existing financing directly to the lenders rather than routing them through the original borrower. : Banks actually don’t look at the thousands of individual checks streaming into their coffers every day of the month—they just don’t have the time nor inclination. All checks are processed by machines which are focused on the magnetic codes, payment amount and loan number. : Lenders almost universally find out about a “subject to” situation because of the notification they receive that there’s been a change in the insurance coverage that shifts it from the old owner to the new owner. : So the wise guys camouflage the insurance change by one of two ways. One is by getting their insurance agent to send in a new policy in the old owner’s name, but holding in their office file a “contract for deed” rider showing the owner’s equity in the new buyer’s name. The other way is by making the transfer from buyer to seller look like a transfer to the seller’s living trust and then buying the beneficial interest in the trust. This approach seems to work beautifully. : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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