Facing Foreclosure? Little to No Equity?
Q: What is the Deed Program?
A: The Deed Program transfers property ownership but keeps the current mortgage in place, allowing the payment to be made on your behalf until the loan is paid in full.
All closings under The Deed Program are completed through a local licensed real estate attorney.
Q: Is this legal?
A: Yes, on line 203 of the HUD statement (document provided when a home is bought/sold) there
is a line option that indicates a property is being sold ‘subject to existing financing’.
This is exactly what occurs when selling property using this option.
We are keeping your current mortgage in place and making the payments on your behalf.
Q: Is this the best option for me?
A: This option typically works best for a seller who:
*Needs to sell and does not require a large sum of cash at closing
*May have little to no equity in the property and is unable to sell through a realtor
*Has a mortgaged property they no longer wish to keep
*May be experiencing a financial hardship/health concern which impacts them from keeping the loan payments current
*Has some equity, but needs to sell quickly due to relocation, military orders, or other reasons
Q: How long will the mortgage remain in my name?
A: The mortgage will remain in the name of the seller until the balance is paid off in full.
Q: How long will it take to close?
A: We typically close within 30 business days, however, depending upon the needs of the seller, status of the mortgage and/or if other issues arise impacting closing this timeframe can be adjusted.
Q: Who handles maintenance and repairs on the property?
A: We will be responsible for all maintenance and repairs on the property.
Q: How will selling under ‘The Deed Program’ impact me getting a new mortgage in the future?
A: We cannot make any guarantees over future creditworthiness nor lending guidelines.
However, if your future lender requests documentation to confirm your prior mortgage is being paid, feel free to contact us and we will provide proof of payment. You may also retrieve online statements from the prior lender reflecting payments made.
Q: Are there any out of pocket expenses for me to sell my home using this option?
A: No, our company covers all expenses related to closing the transaction.
Q: Do I need to clean out the property or make any repairs/updates before the property is sold?
A: No, our company will purchase the property in as-is condition.
Q: What happens if mortgage payments are not made?
A: If payments are not made, it would reflect negatively on your credit report.
However, for your added protection, the closing documents will also advise of your right to foreclose if payments are missed after a specified period.
Q: How can I confirm payments are being made?
A: Payment confirmations can be made by contacting the lender’s customer service number or logging into your online account with the lender.
Q: How much money will I receive at closing?
A: Outside of paying closing costs and potential arrears (if the mortgage is past due), we typically purchase with nothing down.
*If funds are needed to relocate locally, those can be negotiated.
Q: If I have little to no equity in my property, can I use this option to sell?
A: Yes, we purchase properties with high to no equity.
Q: If I am behind on my mortgage and/or facing foreclosure, will you bring my loan current?
A: Yes, the mortgage will be brought current at closing (a wire will be sent directly to the lender by the closing attorney).
Q: How will using The Deed Program affect my credit?
A: Our timely payments on your mortgage should strengthen your credit score. As the number of on time payments grow and the loan balance decreases you should begin to see a positive impact (given other items on your credit report are also in good standing).
Q: Do I need to notify the bank of the pending deed transfer?
A: No, they do not need to be notified. Timely mortgage payments are the priority for the lender, not who is making the payments.
Q: What if either my spouse or I die, what responsibility will my heirs have?
A: There would be no responsibility to the heirs. Since we would own the property, we would also continue making payments to the lender as normal.
Q: Who pays for the property insurance?
A: We do, our company will obtain a new non owner-occupied policy. The listed policy holders will be as follows: the seller(s), the lender and our company/business entity name. If an insurance claim needed to be filed at any time, we would file it.
Q: Who pays for the property taxes?
A: If property taxes are not already included in the mortgage payment itself, we would pay the taxes separately.
Note: most mortgage payments are made up of the principal, interest, taxes and insurance so a separate payment is not often required.
Q: I have significant equity remaining, can I be paid for that if I use the Deed Program?
A: You will not receive a lump sum for your equity at closing. If there is significant equity remaining, the attorney would draft two (2) separate agreements at closing.
One agreement would be for the payoff of the loan itself under The Deed Program and the other would be for the terms set to pay out the remaining equity to you.
Note: If you require a significant amount of equity be paid to you closing, please consider other options to sell your property.
Q: When will you start making my mortgage payments?
A: Payments will typically begin on the first day of the month following the 30-day period after the close and be made directly to the lender.
(Example: Closing happens on August 30th, our first mortgage payment would be October 1st)
*Note: If the loan is past due and/or has a potential foreclosure date, the mortgage would be brought current at closing.
Q: Can I claim this property as a rental on my taxes once your company takes ownership?
A: No, as we would own the property, the tax benefits of ownership would follow.