Posted by JohnBoy on May 26, 1999 at 19:31:41:
My guess is she would need to get a release from the first note holder to free up the lots. More than likely the first has a lien covering all the property.
Is This Like Any Other Subject-To Deal? (LONG) - Posted by Stacy (AZ)
Posted by Stacy (AZ) on May 26, 1999 at 19:19:47:
Some of you may recognize this owner from my previous post. I’ve got a friend that owns four weird sized, adjacent lots. Her house is on one of them, which she wants to stay in. However, none of the other lots are useable because of their size (for example, one of them is 10ft by 12ft). All of these lots are under the same deed, and she’s paying on a first and second mortgage on them…both are private, and neither have “due-on-sale” clauses in them. The first mortgage was seller finaning when the previous owner bought the property from the original owner. The second mortgage was seller financing when my friend bought the property.
She is going to have the lots resurveyed and split into two “regulation” sized lots. She wants to sell the second lot to pay-off her second mortgage, and reduce her monthly payments.
So, here’s the question. Can she legally do all of this as long as there is no due-on-sale clause? The proceeds from the sale of the extra lot go to pay off the second mortgage, which leaves the original first mortgage. Does she just sell the lot “subject-to” the first morgage, since she’ll still need to be paying on the first note?
Or should we not worry about it, and presume the title company will handle everything?
Stacy