This is the absolute worst case. And as smart investor, you should know what it would look like.
In all cases, you'd just get the house back with a reduced loan and possibly improvements on the home.
Since we have a lot of assets and you're in the right with your name on the title, the last thing we'd want is a long legal issue that's bad for me and bad for you.
And just incase we fall off the earth completely, you need to be covered. That's why we sign an agreement that let's you take back the house EASY PEASY if we miss 2 mortgage payments. No hassle.
How would you know? You still get monthly statements and can see the progress. No secrets.. no tricks..
The best news is.. that's no longer your problem!
Whether we have tenant problems, repairs, late night phone calls, an earth shattering explosion.. anything
We have large reserves, insurance, and multiple properties to cover any lulls
I get it.. there's a statement on all mortgages which is the "Due on Sale Clause". This scary looking section says the bank has the option to call the loan due when we sell or transfer it.
The big thing is... the only thing the bank really cares about is payments are being made. If their loan is performing and they're sitting while making money, why would they EVER get rid of it? They would be shooting themselves in the foot and costing themselves money.
Even though the due on sale clause is EXTREMELY rarely used... (google it, you'll see.. its like an old fable where one person's cousin had it called 10 years ago). We go the extra mile and put the property into a trust.
What's a trust do? It doesn't show the bank who owns the property and looks like simple estate planning where you give someone (us) the power to manage the property.
And even if... ALL that doesn't work. The absolute worst thing that happens is we sell the property using our realtor to fully pay off the mortgage. The property will likely appreciate and be in much better condition - which makes that easy.
