baldeagle 0 Report post Posted February 25, 2004 When is this used and what does it do? Share this post Link to post Share on other sites
pinkerton 0 Report post Posted February 27, 2004 Greetings baldeagle, One way to look at mortgages is that they are deeds of trust that secure some type of performance. For example, a deed of trust securing a promissory note essentially ensures that the person who borrowed money pay it. If the borrower doesn't pay, then the lender can forclose on the property that was used as security. Same with performance mortgages. The deed of trust (mortgage) is used to make sure that the promisor specifically perform the lease option contract that is secured by the deed. No performance? The buyer can sue to require the seller to honor the option. This would be recorded like any other deed. Cool, No? Cool, Yes! Remember, there's no guarantee that a seller will agree to such a mortgage. But, "if you don't ask, you don't get." Mike P. The Legal Eagle Share this post Link to post Share on other sites
Guest godaddyo Report post Posted May 6, 2004 Pinkerton, Have you ever heard of anyone using a performance mortgage to get paid out of a deal, where they didnt want to take title, so to secure their interests they used a performance mortgage to get paid out of a deal, mostly done to avoid seasoning or double closings? How would you explain this to your title company to have one written up or would you do it yourself using a standard fannie mae mortgage? I wonder how you can create a mortgage where there is no real exchange of property or money? G Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 7, 2004 Pinkerton, Have you ever heard of anyone using a performance mortgage to get paid out of a deal, where they didnt want to take title, so to secure their interests they used a performance mortgage to get paid out of a deal, mostly done to avoid seasoning or double closings?I'm not Pinkerton, although I played him in a cameo appearance on The Soprano's last week. However, the answer to your question is, yes, what you describe can and has been done by investors for just the reason you describe.How would you explain this to your title company to have one written up or would you do it yourself using a standard fannie mae mortgage? I wonder how you can create a mortgage where there is no real exchange of property or money?A mortgage needn't be just a financial lien. It can also be a lien to secure performance. That is, to guarantee that the parties in the agreement adhere to the terms of that agreement. Should they fall short of that, that would give you the right to foreclose on that homeowner, just as if they weren't paying you a financial lien you had on the property. Your title company probably won't have a Performance Mortgage handy, since this is not how they typically close deals. And, no, I don't think you can alter a FNMA document to fit your needs here. Your best bet is to use an existing Performance Mortgage from a trusted source. Another investor, perhaps, or maybe a knowledgeable real estate attorney in your area. Share this post Link to post Share on other sites
rg200 0 Report post Posted June 13, 2004 are there any other types on Leins that you can use to accomplish the same thing?(ie: a mechanics Lein ) Or would you be able to use a promissory note attached to the house?Ron Share this post Link to post Share on other sites
pinkerton 0 Report post Posted June 22, 2004 Simply put, mortgages are liens...but for real property for specified purposes. Liens are like tools...the right tool (lien) for the right job! I suppose you could record a mechanics liens on real property, but they are generally used to ensure payment for services rendered to the property...like a mechanic working on your car. This would all be controlled by state debtor/creditor law, but I hope this general explaination helps. Mike P. The Legal Eagle Share this post Link to post Share on other sites