Expert: liznarr - 7/10/2009

Question
A friend has gone through a divorce and was left with a home
he purchased. He can no longer afford the house and has asked
me to just take over the payments. Is this possible and if it
is what paperwork needs to be done. Refinancing is not an
option. Texas

Answer
Hi Jose,

If you want to legally take title if you take over the payments, you would have to contact your friend’s mortgage company and ask if the mortgage is assumable.  Most mortgages are not assumable now.

There might be another option available for you -- a Bond for Title.  In this type of Agreement, the title remains with the Seller until the purchase price is paid by the Buyer.  Title is conveyed to Buyer once contract terms are satisfied.

A Bond for Title Agreement has been somewhat controversial in the past because many mortgages contain escalation clauses, calling the entire mortgage balance due immediately if the owner transfers title.  While a Bond for Title does not transfer title (at least not until all contract terms are met), it effectively … in most instances … bypasses any associated clause(s) in a mortgage if an owner is no longer in possession of the mortgaged property.

You should consult with a good real estate attorney in your area to see if this method is a possibility for you.  If so, the attorney should draw up the agreement.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth Narr