The lender may not have been notified. He bought the house from the seller and will continue to make payments on the outstanding loan.
Is this what a "wraparound" does? The current owner sells it, but doesn't tell the lender. They can change the ownership of the home at the county recorder or not. typically the lender doesn't find out, even if they do. The loan would have a due on sale clause, so if the lender finds out they could call the loan......
I bought a house this way once. The seller split, and I paid him an agreed upon amount. I recorded the house into my name with his Quitclaim deed. I made payment to the bank with cashiers checks, so no name was on them.
It worked for a couple years, until I was refininacing my own house, and the new lender called for a payoff on the rental to verify my credit...ooops. I got a due now notice from them....so had to refi it as well.That must have been what he did because there were no loan docs, escrow nothing. As a matter of fact, this guy doesn't have anything (except a house now) He couldn't even buy a 4 year old Tahoe from any reputable dealership. He had to go to some place in Pomona where you put a down and have outragous monthly payments. If you are a second late, they come get your car. He bought the Tahoe 3 weeks ago and has those people calling him at work trying to get paid. He'll be walking pretty soon.