Posted by Ken on November 23, 1998 at 07:43:18:
Well, I’m not John but here’s my 2 cents.
Any mortgage still on the home when sold will be paid out of the funds at closing by the title company. I have bought several notes this way and have not been able to buy some because the note was not worth enough to pay off the first mortgage to put me in first position. The home owner may or may not end up with any cash at closing, it will depend on what the amount of the first mortgage is.
This would be the same with a partial. The note holder would have to sell enough payments to cover the first position note or he would not have a deal.