Posted on: 13th Apr, 2009 12:00 pm
My husband and I want to buy a house in an "owner will carry" situation. The house is owned by a land trust which is the second "owner" of the property. The trust paid the first owners not to foreclose, and took over the payments directly to the bank. The first owners still have the note in their name. We would be buying this house by buying the land trust that owns the house, and we would also be paying directly to the bank.
If we do this, what kind of ramifications could there be because the note is still in the first owners name? If the first owners file bankruptcy, could the bank take the house even though we are paying on it? Are there any other things to watch out for?
If we do this, what kind of ramifications could there be because the note is still in the first owners name? If the first owners file bankruptcy, could the bank take the house even though we are paying on it? Are there any other things to watch out for?
I just though I ought to add that the deed lists the trust as the owner, and so when we buy the trust there will be no change on the deed.
Hi fairydust,
In my opinion, there can be ramifications. As the actual deed is still in the name of the original owner, if they file bankruptcy you may lose the property. So it would be better if you could consult an attorney in this regard and take his opinion.
In my opinion, there can be ramifications. As the actual deed is still in the name of the original owner, if they file bankruptcy you may lose the property. So it would be better if you could consult an attorney in this regard and take his opinion.
The deed is NOT in the name of the original owner, it is in the name of the Trust. The deed would continue to list the Trust as the owner, but ownership of the Trust (and therefor the house) will be transferred to us.