Here is the question:

Can I sign my bank mortgage over to someone else?
Basically, I heard you can do a 'purchase money loan' which has no
recourse to the persons that signed the loan papers.  Basically you
can legally 'sign' your mortgage over to another person.  The bank can
only take the home if the loan payments are not paid..if this happens
they cannot come after the ex-onwer..  In 1997 HUS sent all lenders a
notice letter saying that if the loan payments are being paid the
lenders are not to use the 'due on sale clause'.

So, can this actually be done?  I'm looking for proof that this can be done...

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Request for Question Clarification by sublime1-ga on 14 Jul 2006 00:00 PDT

johnny...

I'm not finding any proof that such a thing exists. What I am finding:

Assumable or Transferable Mortgage

"Assumable mortgages require the lender?s approval. When you assume
 a mortgage you inherit both its interest rate and monthly payment
 schedule. It can mean big savings if the interest rate on the
 existing mortgage is lower than the current rate on new loans -
 the lender, though, can change the loan?s terms. Assumable mortgages
 aren?t a free ride: you still need to qualify for the loan and you
 have to pay closing fees, including the costs of the appraisal and
 title insurance.

 The lender also holds the seller liable for the loan. For example,
 if you default and the lender forecloses, but the property sells for
 less than the loan?s balance, the lender can sue the seller for the
 difference."
http://www.citifinancial.com/glossary/defin/AssumableMortgage.htm

...and...

"From the seller?s point of view, it may pay to be cautious about
 allowing a buyer to assume an existing mortgage on which you are
 personally liable. Depending on the state and terms of the mortgage,
 a seller may remain liable on the loan until it is paid off in full.
 So if the house is lost in a mud-slide or fire, the mortgage holder
 may come after both the new buyer and the old seller for any
 deficiency.."
http://real-estate-law.freeadvice.com/mortgage_matters/assumable_mortgage.htm


Purchase Money Mortgage

"The mortgage given by the buyer to the seller as partial payment
 of the purchase of real estate..

 For instance, John is interested in purchasing a property from
 Leann at the cost of $50,000.  Leann is allowing John to assume
 the balance of her mortgage in the amount of $30,000.  John secures
 a purchase money mortgage in the amount of $15,000 and pays the
 additional $5,000 in cash."
http://www.rogueinvestor.com/definitions/purchase_money_mortgage.html


Purchase Money Loan

'Purchase money loan' means any loan the proceeds of which, in
 whole or in part, are used to acquire any collateral securing
 the loan and all extensions, renewals, consolidations and
 refinancings of such loan."
http://www.sdb.uscourts.gov/Decisions/1997Decisions/1997%20-03%20tesch%20htm.htm


These are illustrated in the following scenario:

"A consumer loan company (SP) makes a purchase-money loan to a
 consumer borrower (D) to finance D's purchase of a sail boat.
 A security agreement is executed and money is advanced to D.
 The security agreement contains a provision which describes
 the collateral as a sail boat, but also contains a provision
 under which D purports to grant a security interest in 'any
 automobile hereafter acquired by Debtor'. D subsequently uses
 the loan proceeds to purchase a sail boat. Later D acquires
 an automobile for personal use."
http://www.law.ualberta.ca/research/pers_ppty_sec_law/ppsa_overview.htm

Let me know where this takes you...

sublime1-ga

Johnny50: Your information is incorrect. There is not HUS letter. (I
assume you mean HUD--Housing and Urban Development--letter. There
isn't one of those, either.)

There are a couple of techniques for, as you put it, "signing your
home mortgage over to someone else." Most, though, will trigger the
"due on sale clause."

You can sell your house "subject to" the current mortgage.
Essentially, you allow someone else to make your mortgage payments.
Generally, in return, the investor will want you to deed your house
over to him. This violates lenders' "due on sale" clauses and--if they
find out and if they choose to do so--they can call your loan...making
the entire amount due immediately. Practically speaking, there are
ways to partially mask this...and some lenders may choose not to call
the loan due. But, if they find out and if they choose to, they can
call in the loan.

There's also a technique which may get around the due-on-sale clause,
but you have to know what you're doing. You create a land trust, then
move the property into the land trust, naming the investor/purchaser
as a second beneficiary of the trust. The investor/purchaser makes the
payments to the trustee; the real estate is now in the land trust and
classified as personal property. When you want to transfer the deed,
the property is brought out of the trust and sold to the investor.
(That's a gross oversimplification of how it works.)

Maybe a better question is: What is it exactly that you want to
accomplish? Rather than looking at techniques, what's the broader
picture? Tell us the scenario, and there probably are some ways to
accomplish what you're trying to do.