Ensuring Mortgage Payment Timeliness

To ensure mortgage payments are made punctually, we employ a third-party servicing company to automatically withdraw funds from our account and direct them to the appropriate recipients. In the case of a subject-to-deal, this ensures both the mortgage and equity payments are covered. This arrangement not only streamlines the payment process but also serves as tangible proof of payment completion, aiding sellers in validating their Debt-To-Income clearance for the property.

Addressing Payment Defaults

If a payment is missed, a pre-signed Deed in Lieu held at the servicing company comes into effect, transferring the property back to the seller if the buyer defaults for over 30 days. The seller retains all benefits of loan paydowns, property improvements, and appreciation. They have the option to resell the property, potentially at a higher value due to these enhancements.
Repair and Maintenance Responsibilities
Post-deed transfer, the seller is absolved from repair and maintenance responsibilities, which fall to the deed holder - the buyer. With the seller’s name retained only on the mortgage, all maintenance and repair obligations are borne by the buyer, ensuring the seller's peace of mind.
Addressing Payment Defaults

Utilities and Insurance Protocols

We facilitate the seamless transition of utilities into our name and update the insurance policy to include both parties. This ensures comprehensive coverage and utility service continuity, bolstering both parties' confidence in the property's management.
Debt-To-Income and Property Acquisition
In the context of Conventional and FHA loans, we leverage payment statements from the servicing company to demonstrate to lenders the external servicing of the loan. For VA loan holders, the subsequent property purchase capability hinges on the remaining entitlement, with the option to utilize “Subject-To” sale proceeds for down payments.

Credit Implications of “Subject-To”

The seller’s credit score is positively impacted by on-time payments, as the loan remains in their name and timely payments are reported to credit bureaus. This arrangement not only enhances the seller's credit score but also alleviates the financial burden of credit repair.

Navigating the Due-On-Sale ClauseAddressing Payment Defaults

Though infrequent, if a due-on-sale clause is invoked upon the bank’s discovery of deed transfer, multiple remedial actions are available. Engaging in dialogues with lenders, utilizing a land sale contract, or reverting the deed to the seller and establishing a lease option are viable pathways to address this challenge, ensuring the property's and the financial arrangements' integrity.