Since we wonít have the mortgage in our name, we need release forms that allow us to interact with agencies. Those agencies are going to be the bank, the lending institution and the insurance company.
We close with real estate attorneys and I run all these through attorneys now. One of the reasons I do that is because I want to make sure the seller understands what weíre going through and what weíre doing.
My attorney is very good at saying, "You understand that the mortgage stays in your name and that if he doesnít pay, youíre going to be in trouble, right? But he has agreed to pay, but he could stop, and if thatís the case, itís still in your name. You understand that, right?"
I have a tremendous amount of muscle and leverage by the fact I did a formal closing with an attorney and they signed in front of an attorney. I used to do these at tabletops and it was kind of fun and exciting to do that, but I donít think itís safe. So try to sign in front of an attorney.
The mortgage remains in their name until paid off. I ask for a release form with their social security number on it. This way we have access to the mortgage company. We need to immediately verify that the mortgage booklet will be sent to us and not end up going to the house.
We want to put somebody else in that house either through a lease option or a cash purchase. So I need that mortgage sent to me and let them know that Iím making the future payments.
The seller signs off a power of attorney and allows us to work with the insurance company and the bank. This is an important document here because it gives you the latitude to go do what you need to do.
If you donít have this document, you donít have the power to speak with banks about the home. You donít even have the info they will be asking for.
So keep this info in mind when youíre piecing your system together.