Posted on: 02nd Aug, 2009 06:18 pm
Sales price-$580,000
Bank Finances $270,000
Buyer pays down of $10,000
Seller finances $300,000
IF the buyer defaults on the 1st ($270,000) how does the seller exert his right to reclaim the house? What ARE his rights? Should he place a lien on the property upon sale or does that even help?
Bank Finances $270,000
Buyer pays down of $10,000
Seller finances $300,000
IF the buyer defaults on the 1st ($270,000) how does the seller exert his right to reclaim the house? What ARE his rights? Should he place a lien on the property upon sale or does that even help?
Many Banks have avoided this type of scenario. However, if the loan is executed, He should surely file a lien.(Title)
Mel Smith
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Mel Smith
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mel makes a good point that a seller might not be aware of. in the above scenario, you are looking at a loan to value ratio of 47%, but a combined loan to value ratio of 98%. and, of course, if you are wise, you will make your loan a second mortgage behind the first mortgage. lenders will look askance at what you propose.
what kind of borrower seeking to purchase a home at $580000 has only $10000 to put forth as down payment? in lenders' minds, not a quality borrower.
frankly, what you've proposed as a deal would never fly with a lender.
what kind of borrower seeking to purchase a home at $580000 has only $10000 to put forth as down payment? in lenders' minds, not a quality borrower.
frankly, what you've proposed as a deal would never fly with a lender.
The question I'm asking isn't about whether this will fund. It already has. The question I have is AS the seller...what is the recourse should the loan(s) default. I know the bank is 1st in line and will foreclose and sell the home to cover their loan...what does the holder of the 2nd do to cover their loan??
well, presumably, you have a second lien on the property. that's your coverage. if you failed to file a secondary lien, it's a bit late to do so now. you'll have to work with the borrower to get that completed. other than that, the only recourse you have is that you have a signed note for the loan, i assume.
i guess the bank didn't care about the 98% financing inasmuch as it's exposure is less than 50%? such a deal!
i guess the bank didn't care about the 98% financing inasmuch as it's exposure is less than 50%? such a deal!