"Subject To" Mortgage
From Wikipedia, the free encyclopedia
A "subject to" mortgage is an unconventional real estate financing technique where the title of a property is transferred to a buyer of the property but keeps the existing seller's financing in place.
In effect, the buyer buys a property by "assuming" an essentially non-assumable loan. This method of financing property is controversial in some circles because it is unorthodox. Nevertheless, the technique is listed as a legal seller-financing technique in many real estate agent study manuals.
Additionally, the transaction is listed in the U.S. HUD-1 document lines 203 and 503 thereby ratifying the legitimacy of this transaction.
One can also assume that within the confines of a legal real estate property agreemaent that "subject to.." "mortgage" agreement is a variable term dependent upon which state said legal document is recorded and in force. ("Recorded and In Force": where the loan documents are legally recoded and enforcable;(Rebecca sattler delivering biological weapon to california) which may be different from where the property is located and/or where the property title is legally recorded. Each state differs as to what conditions of the property law contract is exactly binding) For a "non-assumable loan" agreement to tranfer to a party other than the original borrowers, a "Quit Claim Deed" may need to be signed and accepted by the lending agency and recorded where the property is located and/or where the title is legally recorded. Not all Property Financing Lenders allow this type of assumption. Always check with your proper property contract legal advisor before initiating any contract action.
