Is owner financing real estate legal?

Hi ANN!

Welcome to forums!

It won't be a good option to owner finance the property as you already owe a mortgage on it. If the lender comes to know about it, he may call the loan due immediately.

Sussane

i have a serious question about the proposition of owner-financing when there's an existing mortgage on the property. i think buyers are put at great risk in circumstances like that. we've seen testimonies of those whose payments seem to go nowhere while owners pocket the funds and neglect to pay mortgages.

if a buyer asks, i'll be pleased to tell him to go find a real lender to help him.

Hello

I need to sell an investment property in Rio Rancho New Mexico. One of the options provided by my agent was a finance by owner sale. As a seller what are the pros and cons of this type of sell? Would this affect my loan at all? Do I need to notify my loaner about it?

Thank you
Disraeli

Welcome Disraeli,

Your query has been replied to in the given page:
http://www.mortgagefit.com/ownerfinance/affect-seller.html

Take a look at it. Hope it helps you.

If the home is paid in full and the owner is functioning as a lending institution. Is there any way that the payments can be reported to a credit agency?

Not at all likely, Renee.

paid 5000 down and two house payments. seller mortgage company now is aware and may possibly call note. we have paid house payments directly to mortgage company. what options do i have if any?

Welcome rsm,

If there is a mortgage on the property, then the seller cannot go for owner financing. The seller has the rights to call the loan due immediately. If you want to save your interest in the property, you need to contact the lender and pay off the loan in full and purchase the property.

rsm, your first option ought to be to contact an attorney. If you haven't used the services of one already, you may be in so deep that it'll be too late. You need protection, and that's the first step to take.

what options does the seller have for taxes received on monthly payments. tax consequencies

Hi butch!

Welcome to forums!

As far as I can understand, the monthly payments received by the seller may be considered as his income. Thus, he will be liable for paying the income tax to the IRS.

Feel free to ask if you've further queries.

Sussane

13 years ago we did a owner finaced home. The owner has been taking our payments, but evidently not making them to the bank. People from the bankcame to our house today and said they are foreclosing on the property, to we have any legal rights since we have been making our payments? We registered at the county court house and have paid taxes on the property. We had a contract with the owner for 30 year finacing.

Hi gbarnett,

You are the tenants to the property. If the landlord did not pay the mortgage on time, then the lender will foreclose the property. You won't be able to stop the foreclosure though you've paid the rent payments on time. However, henceforth, you can make the payments to the bank and stay in the property for the time being. You can also negotiate with the lender and the new owner to check if they are ready to let you rent the property.

Thanks

GBarnett, you need to engage the assistance of an attorney in this situation. Your contract will help you in getting relief here, I believe. But don't try to do this yourselves - it's imperative that you get proper legal advice.

Thanks we have already got an attorney. Something isn't right somewhere. The bank probably shouldhave checked that the houses were under contracts before they used them as collateral. Ours is registered in the tax office where we have paid properety tax for 12 years and got homeowners exemption. He took our payments and saved his house from foreclosure by one day.