Mortgage Assignment Case Study ~ Villamoura

I guess we could call this case study the most infamous because it’s the first one where we interviewed the buyers and sellers at the closing. 

We were referred to these sellers through my husband’s sister.  What was great about these sellers is that the husband is studying to be an attorney and he had done some of his own research on owner financing prior to even meeting with us.

So, not only was this a warm referral but after examining selling alternatives on their own, they also agreed with us that owner financing / mortgage assignment was one of the options and alternatives they wanted to pursue.

These sellers were up to date on their mortgage and were not in a financial bind, yet they really wanted to downsize to compensate for other expenses, including their schooling, so they were motivated.

We started marketing their home, and as you saw in the video, we were able to find a buyer within 3 weeks!

The buyer was a Pastor ,who like many self employed individuals, could not prove his income and as a result could not get bank lending.  He had also recently divorced and as a result, had some credit issues that needed time to resolve.

Originally, our buyer had a large down payment but an unexpected business expense came up and so he was going to wait.  However, we thought that these sellers and he may be a good match and may be willing to be flexible enough to make the transaction work and so we showed him the house and he fell in love with it.

So, after some creative number crunching, the buyers and sellers agreed that the Pastor could put down a small initial down payment and pay the remaining down payment over the course of the next 6 months.

Our profit on this deal was just under $12,000 —-> $11,996.00

The important lessons on this deal were:

1.  Flexibility.  This flexibility on the sellers part meant a quicker sale for them. For the buyer, it meant that he could get into a home sooner than he anticipated while still fulfilling his down payment obligations.

2.  Referrals.  This has been another one of the advantages of being in the mortgage assignment business…we are getting a lot of referrals.  We have a solution that no one else is talking about or offering.

Now that it’s becoming more widely known, there are still other investors and realtors who just don’t know how to do it and so we are getting their referrals too.

There are many great things about doing Mortgage Assignments…

—> We are helping sellers who have no other GOOD options and are likely facing foreclosure, this is their BEST alternative.

—-> We are helping buyers become homeowners.

—-> We are providing a solution many investors, realtors and brokers are just learning about and many of them are THRILLED to pass these deals over to you if you can help them!

  • Thane Schaffer

    I too have been through a training course a couple of years back which emphasized many different approaches to making deals, however the mortgage assignment idea was not one of them. I’ve seen Phil’s videos now and am interested in learning more. His site is “temporarily” full when it comes to registering, so, after listening to a couple of your videos Dani, I had three questions that I’m especially curious about because I don’t see anyone in my city (Portland Oregon) offering mortgage assignment deals:

    1. How long before the seller deeds the property to the buyer? Is it after the mortgage(s) is(are) finally paid, i.e. potentially 30 years? If seller is deceased when the buyer pays the mortgage(s) off then what?

    2. If down the road a few years from a given deal, the buyer stops making payments and refuses to leave, will the seller have to foreclose to get posession back as well as deal with payments that the buyer is not making?

    3. If like in question 2 scenario and you have to foreclose, if the property is worth considerably more at that time or if the buyer has paid considerably into the principle of the loan and now there is a lot of equity in the property will the seller have to compensate the foreclosed buyer for the new found equity at some future time?

    Thanks for your insight!

    • Dani Lynn Robison

      Hi Thane,

      To help answer your questions:

      1. The seller deeds the property to the buyer at closing. I would defer to my attorney on the question about if the seller deceases. In all my deals, I always leave the legal questions to the legal guys/gals! 🙂
      2. Yes, if the buyer refuses to leave, the seller will have to foreclose and maintain payments during that process. Keep in mind, if the seller originally opted for a mortgage assignment transaction, he/she was very likely facing foreclosure which means for a few years, he/she avoided that horrible scenario. Possibly now, he/she is in a better financial situation and may even want to take the house back. Whatever the case, if the seller again is facing foreclosure again, then they are back where they started, not necessarily in a worse position.
      3. The seller will never have to compensate a buyer for equity if they have to foreclose on them. It would be like asking if a bank was going to give any of the equity back when they foreclose on homes. If the buyer has any equity and is facing foreclosure, it is better for them to sell the home and try to capture that return themselves.

      Hope that helps!

  • Thane Schaffer

    …Sorry, one more (fourth) question.

    4) if a seller has a variable interest rate HELOC on their 2nd can this be made to work with a buyer when you have that future uncertainty of rising FED rates and the mortgage is tied to the variability of the FED rate?

    Thanks again for your insight!

    • Dani Lynn Robison

      I don’t personally assign loans with ARMS – that’s just me and that’s partly because I don’t want to be responsible for explaining how it works with an expectation that they actually understand. if you take on deals with ARMS, I’d have a loan officer working with you to explain the underlying lien and then it is up to the buyer if they want to take on that kind of note. Just disclose, disclose, disclose and get them to sign off about everything you disclosed.

  • David

    I am interested in purchasing the MAPS system and I know that you are only allowed to work in three territories once you purchase the system. I live in Houston, TX and I want to make sure that this is one of my territories. Can you tell if there is still room in this territory before I purchase the system?


    David Hannah

    • Hi David, I just sent you a quick email as well but, yes, I just logged in the system and Houston is still available! I am excited you will be out there because we have buyers but need more MAPS investors out there getting houses!! 🙂

  • BOB

    Hey Dani Lynn, I love your articles and posts and am just trying to pull the trigger on MA. Phill mentioned in one of the intr videos that the system has videos explaining to the buyers and sellers the whole process of Mortgage Assignment and that we could preview these on the main site. I can’t seem to find them and would appreciate a little help. Thanks for all you’ve done. Bob

    • Hi Bob!

      He does have a video explaining MA to sellers but I haven’t seen one for buyers. This video is on the online resource center once you buy the system, I haven’t seen it posted anywhere else or been told that it would be….so sorry I can’t help on that one!

      Let me know if there is anything else I might be able to lend a hand with!