[Mr. Mitra]

I've seen advertisements to take over the mortgages from owners struggling to make it. All you do is assume their payments and they called it pre-foreclosure. It doesn't make much sense to me and it seems fishy. For example I saw a house where the payments were $675 a month with about $134,000 left on the mortgage. Payment was 3 months overdue. It seems a good deal assuming the house is worth under $134,000 but it seems too easy and too good to be true. No down payment and stuff I assume (although I'm sure I'm wrong on this point) What is the likely catch or is it a good deal that helps keep a family from being foreclosed on and going bankrupt?
yes, I mistyped there, as long as the house is worth more than the amount left on the mortgage.
If it doesnt really benefit the current owners of the house, then why would they do it? That was the thing that puzzled me. Because from the sounds of it, the owners get nothing for the sale, except being able to escape the mortgage, but seeing how a house is normally 70% of a person's worth - it seems like a lot to sacrifice. Why wouldn't someone in this position refinance with the government relief package? Maybe because they have back taxes or other things that some of you were alluding to?

[doggiepug12]

i dont own a house yet. so i dont know what to answer to. ask ur insurance people?

[kerrbear]

I would have an attorney look over any papers before you sign. It does sound good but be careful. Check ti see if there are any taxes owed as well. I would assume you will have to catch the payments up too. I guess this would be kind of like your down payment.

[Hope]

i am not sure how assumable work where you live but this is what I know about them with the laws where I live. There are different of assumable......no Qualifying and Qualifying by the bank.....it depends on the mortgage contract. Some of them you can assume until the mortgage terms are up and others you have to be approved by the bank after a year. Things to watch for are it the value of the mortgage is way to high for what you could resell for and the interest terms of the mortgage....make sure it payments will not go through the roof. Also check to make sure there is no leans on it. The 3 months of back payments will have to me made and there could be a fee for them being overdue. Make sure the taxes have been paid. Best advice is to get a lawyer to help you.
Assumable can be a great way to get your foot in the door and can sometimes save you money.
Best of luck

[rvgetsla]

Too good to be true is something to watch out for. Yes, there are scams out there. However, there are legitimate deals to be had as well. From what numbers you give, I suspect something is being left out. There may be years of property taxes in arrears. The house may not be worth what you will have to pay once you include everything they have not included but that you will have to pay. You may not be "assuming" an existing mortgage, but instead may be required to qualify for a mortgage of your own to pay the existing mortgage off in full, which means you are essentially buying a house just like anyone else. If you have to qualify for your own mortgage, then it is very likely you will have to come up with a down payment. Most mortgages are written such that if the house is sold, the existing mortgage balance is due in full at closing. You have it backwards. This would be a good deal if the house is worth MORE than the existing mortgage balance/sale price. This does NOT "help out" a family being foreclosed on nor prevent filing bankruptcy. If anything, this is simply a distress sale. You still have all of the usual stuff, escrow, closing, the works, which is involved in the sale of real estate