Assignment's and Options.. Important

For any of you out there doing wholesaling ( assignments ) and option contracts you may want to speak to your lawyer about this.

I have recently found out that if you assign a property to your buyer, one that purchases it with a mortgage. If somewhere down the road they default on their mortgage YOU can still be held responsible. This may also be an issue for option contracts.

There is a way around this however, you can get what is called a letter of Novation from the lender which basically says that you are free from anything that may happen in the future such as the person defaulting on their mortgage.

Check with your attorney and ask them about Assignments and getting Novation !!