What is a Mortgage Assignment?
An mortgage assignment is a document which indicates that a mortgage has been transferred from the original lender or borrower to a third party. A mortgage assignment is most commonly seen when lenders sell mortgages to other lenders, in the secondary market. Is it the same as an assumable mortgage? Well no, not necessarily, although assumable mortgages can be transferred to a new buyer much in the same way a mortgage can be assigned to a new buyer
How Does a Mortgage Assignment Work As An Investment Strategy?
With a Mortgage Assignment, you are simply selling a home which is not selling through traditional real estate means (which there are TONS of right now) to buyers that do not qualify for traditional financing (which there are also TONS of right now).
Home sellers LOVE mortgage assignments because it is a quick and easy way for them to sell a house that they’ve had a hard time selling, or that they are unable to sell because it it upside down (That’s right this strategy works great even if their house has very little equity, no equity, or even negative equity!). In many cases the home owners are even able to sell their house fast for near full market value! (How many of these types of sellers and properties are out there right now)?
Home Buyers LOVE mortgage assignments because it is an easy way for them to buy a home WITHOUT qualifying for a loan through a bank… and WITHOUT making a large down payment. (These types of buyers are everywhere right now, because as you know, it’s very difficult to buy a house today with conventional financing… even if you have good credit and a 20% down payment).
As an investor doing Mortgage Assignment deals (you can easily do 10 or more of these deals a month)… you can easily earn $10,000 or more per deal! Just by putting together eager home sellers with eager home buyers!
The best part about mortgage assignments is that they do NOT cost you any money whatsoever to implement the strategy! It is truly a “no money down” strategy!! (Even the marketing to find leads for this strategy is NO COST…because it involves using Craig’s List!)
Will A Seller Really Consider Mortgage Assignments?In general – sellers will always do what is in their own best interest. For a seller with no equity their are not too many good options:
- They could list the home with a REALTOR – BAD (they will have to bring a lot of money to the table)
- They could do a short sale – Worse (long process, bad for their credit, and could end up in foreclosure)
- They can go through a foreclosure – As bad as it gets
- Or they can choose a Mortgage Assignment – This is the best option by far (it won’t cost them anything and won’t hurt credit)
Mortgage Assignments can be a very lucrative undertaking for any investor and are an ideal strategy for any new investors. However, there is a lot to know and learn, and you will only get good by going through the deals with someone that understands the intricacies of the paperwork, insurance, and negotiations with both buyers and sellers.