Posted on: 18th Dec, 2006 09:25 am
does anyone know about silent second?
hi ballmer,
welcome to mortgagefit forum.
silent second is a kind of second mortgage note which is made at the time the first mortgage note is prepared and the buyer is not able to come up with the required amount of down payment.
but what is different is that the first lender is not told about it and is also not disclosed on the hud-1 settlement statement for the first mortgage.
as such it is a violation of law to get second loan without making the first mortgage lender aware of its existence.
hope this information will be helpful for you.
blue
welcome to mortgagefit forum.
silent second is a kind of second mortgage note which is made at the time the first mortgage note is prepared and the buyer is not able to come up with the required amount of down payment.
but what is different is that the first lender is not told about it and is also not disclosed on the hud-1 settlement statement for the first mortgage.
as such it is a violation of law to get second loan without making the first mortgage lender aware of its existence.
hope this information will be helpful for you.
blue
Hi Ballmer,
Let me give you one example to make you better understand what Blue has said about silent second mortgages.
Suppose Gary gets a home for $140,000 and the lender provides him with mortgage amounting to 80% of the value of the house which would be $112,000.
Now Gary has to come up with the rest amount, $28,000. But because of his financial position he can't come up with this amount. The seller and Gary make an agreement by which Gary will get the money over his capacity of a maximum of $10,000. He gives the seller a "silent second" for the balance amount of $18,000.
In all of these the lender is kept in the dark about the agreement between the seller and Gary. If lender knew about such an agreement then he will not approve the actual loan as it is unlawful not to disclose the agreement which Gary and the seller have made among themselves.
Hope my example made it simpler for you understand the actual facts.
Colin
Let me give you one example to make you better understand what Blue has said about silent second mortgages.
Suppose Gary gets a home for $140,000 and the lender provides him with mortgage amounting to 80% of the value of the house which would be $112,000.
Now Gary has to come up with the rest amount, $28,000. But because of his financial position he can't come up with this amount. The seller and Gary make an agreement by which Gary will get the money over his capacity of a maximum of $10,000. He gives the seller a "silent second" for the balance amount of $18,000.
In all of these the lender is kept in the dark about the agreement between the seller and Gary. If lender knew about such an agreement then he will not approve the actual loan as it is unlawful not to disclose the agreement which Gary and the seller have made among themselves.
Hope my example made it simpler for you understand the actual facts.
Colin
Borrowers going for the silent second often hide it from the first lender. But the federal and state laws consider it a crime to misrepresent or falsify facts related to a home loan. Also, if the first lender comes to know of it, he can demand full repayment of the loan.
i have a slient second morgage with a 15.63 % shared equity .can this be distinguished by a chapter 13 bankruptcy
hi guest,
in chapter 13 bankruptcy you will have to make payments towards your debts through a repayment plan. unlike chapter 7 bankruptcy, it does not discharge your debts right away. you will have to follow the repayment plan and pay off the debt as much as possible. any balance left over after the successful completion of the chapter 13 repayment plan will be discharged.
in chapter 13 bankruptcy you will have to make payments towards your debts through a repayment plan. unlike chapter 7 bankruptcy, it does not discharge your debts right away. you will have to follow the repayment plan and pay off the debt as much as possible. any balance left over after the successful completion of the chapter 13 repayment plan will be discharged.