I have received several emails from confused loan originators and Realtors wondering if this “Assignment of Mortgage Payment” system is real or just another scam.

There will always be a get-rich-quick scheme and people willing to take your money to sell you a system.  The people who are really making the money are the ones selling the system.

The idea behind an Assignment of Mortgage Payments is nothing more complicated than ABC.  That’s right.  A sells to C…and B collects a fee as the middleman.  Except Homeowner A is still in title to the property and Homeowner A’s name is still on the Deed of Trust owed to the bank.

For a fee, B acts as a middleman and finds C who will “take over” the monthly payments.  In the typical scenario C is a homebuyer who is unable to obtain a loan from a traditional bank or lender for various reasons such as poor credit or undocumented income.  Homeowners considering selling using one of these systems might want to consider that a person with poor credit and undocumented income is an extremely high credit risk. Read: Assume Homebuyer C WILL default.

For homeowners considering this type of scenario, get out your deed of trust and note and READ the whole thing. In there, I will bet you’ll find something called a “due on sale” clause which pretty much means that if you sell the home your lender can call the note due immediately.  The people behind the Assignment of Mortgage Payment System will tell you that this rarely happens and not to worry.  That’s exactly what the subprime mortgage loan originators said to their clients, too: “don’t worry, we can refinance you out of this loan.”  And that’s where these people come from….Subprimers went from there to predatory loan mods to being short sale negotiators to selling forensic loan audits to this.  Next year it will be something else. 

Predatory loan mod salesmen and predatory short sale negotiators also like to use phrases like “this is perfectly legal.” That’s the same thing the AMPS salesmen will say and a dead give-away that this is a scam.  Loan originators and Realtors: Do NOT pay the $900 (and monthly fee) to buy into this system. 

Is there a method of helping distressed homeowners and poor-credit homebuyers that’s legit? Yes, you could do lease-purchases and have a local attorney help draw up the paperwork.  However, I don’t know why a poor credit homebuyer would want to buy a home that’s worth less than what is owed.  With so many bank-owned REOs hitting the market and with FHA/USDA/VA guidelines still flexible, there is no reason to buy a home that’s worth more than what is owed unless you are unable to use the logical side of your brain due to being under the influence of a sociopathic salesman. 

Another legitimate way of selling an underwater home to a homebuyer with less than perfect credit is to have the homebuyer go through a formal assumption with the lender’s loan servicing department.  This can work with an FHA and also a VA loan (though I don’t recommend VA assumptions unless the new buyer is also a Veteran.) But again, why would a homebuyer want to buy a home where the mortgage is higher than the value?  There is NO good reason for doing so unless you’re the middleman making a fee out of putting this deal together.  With a lender approved assumption, typically there is no fee paid to a middleman and that’s why nobody will try and help sellers and buyers come together this way. 

Avoid Assignment of Mortgage Payment System Scams.  And realize that the people behind these scams are trying very hard to get their name at the top of the google search index by simply posting lots of articles with the word “scam” in them. In their article they try to explain why their system is not a scam.