Posted by WilliamGA on January 28, 2001 at 23:23:33:
Scott,
Taking a second if the house doesn’t appraise is certainly an option for you if the buyer is still willing to buy.
Selling a note that puts the property in a negative equity position is quite another thing I am sure. While I am by no means a note expert, I would think that a note like that would have very little value in the marketplace as there is no equity to back it up.
ATTENTION L/O PRO’S - Posted by Scott Az
Posted by Scott Az on January 28, 2001 at 23:10:04:
Does anyone take back a second mortgage when assigning your interest? ex. Sign contract w/ seller for 95,000, then leaseoption it to your buyer for a 120,000. If the house appraises for only 100,000, do you take back a second mortgage on the remaining 20,000? If so what kind of percentage are we talkin here, if I sell the note almost immeadiately? I realize there are many things working against me here first, its a second mortgage, second its unseasoned, etc…
any feed back is appreciated in advance,
thanks
scott AZ
Re: ATTENTION L/O PRO’S - Posted by phil fernandez
Posted by phil fernandez on January 29, 2001 at 08:41:30:
Scott,
That 2nd mortgage in your example would not be salable due to the LTV. Unless the tenant/ buyer is putting a good chunk of money down to close the deal.
In order to sell the 2nd, the LTV of both 1st and 2nd combined must be at or under the 80% LTV.
Also when that appraisal comes back and your tenant/buyer sees he’s paying $20,000 more than the property is worth, my guess is he’ll run.