Are you wondering why you should work with a loan servicing company?

We’re excited to share a series of educational videos with you over the next few months that we hope will answer some key questions about working with Southern Loan Servicing!

Title Companies that work with our Loan Servicing company are able to offer their clients a better service experience. And get the closing on the front and back end of the transaction. Word of mouth and building relationships with your clients builds the trust they want and need for such an important time in their life.

What is a “subject to” mortgage?

This is a sale where the seller is not paying off the existing mortgage, but rather having the new buyer pay the mortgage obligations. That means the seller maintains the responsibility of paying off the loan, but the buyer has agreed to make mortgage payments on behalf of the original seller.

A great alternative financing option, a subject to mortgage can tip the scale in buyers’ favor, but only when carried out responsibly and with the proper knowledge of how to proceed. This also can work as a filler solution to a sale that needs a little more time/money/repair for traditional financing. Often misunderstood, subject to mortgages are not as complex as many initially assumed. If for nothing else, few people are actually aware of what a subject to mortgage is, but the answer is in the name. In its simplest form, the “subject to” in a subject to mortgage refers to the loan that’s already in place. When you purchase a property subject to, you are essentially buying the home subject to the existing mortgage — that’s really all there is to it.

Subject to strategies aren’t all that common, but you will find that they can be useful in certain circumstances. Distressed sellers, for example, may be willing to sell subject to if they want to rid themselves of a property immediately. On the other hand, buyers will tend to favor subject to when the interest rates on the existing loan are lower than the current market rates. Read more about it here.

Owner Financing- how do we get started?

  • Buyer and Seller complete a purchase agreement / sales contract. One can be provided if needed.
  •  Buyer has the option for home inspection, appraisal and abstract (title search) to verify there are no liens, wills, mortgages, or other documents affecting title to the property. This is when verification of the legal owner is made, and all the debts owed against the property are determined.  Buyer typically pays for inspections and appraisals and should note if they waive this option.
  • Insurance needs are established, buyer should price out for new policies and obtain quotes based on sellers’ requirements.
  • Law office or title company should be given all quotes to add to the settlement statement, this includes the servicing companies’ fees, as they should be included with settlement costs.  Property insurance and pro-rated taxes are added to the settlement statement or paid before signing.
  • Escrow/settlement officer oversees closing of transaction. Seller signs deed then buyer signs new mortgage. Seller, real estate professionals, attorneys and other parties to the transaction are paid. Documents are recorded in the county/parish in which the property is located.
  • All sales documents are forwarded over to the loan servicing company, this should include copies or original promissory note, mortgage, terms of loan, copies of insurance documents and tax information.  Signed servicing agreement and contact information must be included.