Does this creative financing sound legal - Posted by mark

Posted by mark on September 27, 2003 at 10:53:40:

Thanks for the input. Supposedly, this guy is a private investor. But I do not understand why he has to structure the mortgage this way. I will have to do a no doc loan because the price of the house would be more than I could qualify for with the current debt and income that I have. So, I went to this hard money guy.

Does this creative financing sound legal - Posted by mark

Posted by mark on September 24, 2003 at 23:51:21:

I am new to this site and I think it’s great. Keep up the good work. I want to buy an REO owned property for $110,000 and it is worth $150,000. It only needs minor touch-up and updating, approx $10,000. I talked to a hard money lender that will do a mortgage and get me cash out by forming a 2nd mortgage. We would close the 2nd mortgage on the same day but at a different time. Does that sound on the up and up.

Re: Does this creative financing sound legal - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 25, 2003 at 01:40:51:

Mark----------

Will the same lender do the first and the second? If not, it sounds as though that lender wants to hide from the first lender that the second loan is going on. Insist that the second loan be disclosed to the first lender. If the first lender accepts the arrangement, then it is ok.

Good Investing************Ron Starr***************

Re: Does this creative financing sound legal - Posted by Mark

Posted by Mark on September 25, 2003 at 15:46:15:

Ron. Thank you for answering my post. The same hard money lender will be doing the 1st and the 2nd which will close at different times on the same day.
I have heard mention of some investors buying a property with a standard first mortgage then, without having been seasoned, refinancing it on the same day to pull cash out. Do you know of any banks that will do this. I am sure that slowed down after the mortgage laws changed last year. Thanks again.

Sounds Fishy - Posted by Rich_Va

Posted by Rich_Va on September 27, 2003 at 09:32:54:

I have done 80/10 & 80/20 loans in the past with the same lender and every time it they are done at the same sitting. I’d ask some questions as to why its needed to be done this way. It may be legit, but remember, you are the one in control, never let anyone else control the situation. If you have any questions, get them resolved right away. After you sign the paperwork, its to late.
Good luck

Rich_Va