Land Contract Legal question - Posted by Alan

import · October 14, 2003, 9:10am

Posted by William Bronchick on October 14, 2003 at 20:10:03:

Actually, the only state that makes an unrecorded ILC void is Maryland. A few states mandate recording, but it doesn’t void the sale if it is not recorded.

import · October 14, 2003, 9:10am

Posted by Alan on October 14, 2003 at 09:10:13:

I have a hypothetical situation. Suppose a seller with little equity sells on land contract. For some reason the lender finds out and decides to invoke the DOS clause (I know this is not likely to happen but just suppose for purposes of this question). I have two questions.

If the buyer is unable to refinance at that time, could the original seller refinance the loan with the land contract in place.
If the seller can refinance, is the new mortgage in violation of the DOS clause. As the “sale” took place before the new mortgage was in effect.

Thanks

Alan

import · October 16, 2003, 12:29am

Re: Land Contract Legal question - Posted by M Lee

Posted by M Lee on October 16, 2003 at 24:29:01:

for scenario 1 the original seller would have tp have you quit claim off to refi it in their names
If you wanted to refi, typically most lenders want 6 months Vested Interest. Vester interest- show that you were paying tax bill, Mortgage, or that you were on title(Recorded Land Contract), Typically unrecorded Land Contract needs 12 months Cancelled checks.

The other thing with Unrecorded Land Contracts, is there are specific lenders who will do them with no cancelled checks, but the LTV will depend on your credit score…

Hope that helps

import · October 14, 2003, 8:11pm

Re: Land Contract Legal question - Posted by William Bronchick

Posted by William Bronchick on October 14, 2003 at 20:11:13:

Yes, you can refi the underlying loan. If the contract was not recorded, you must disclose the new lender that the contract is in existence. Most lenders wouldn’t care.

If the contract was recorded, then the buyer would need to sign a subordination agreement.

import · October 14, 2003, 9:30am

Re: Land Contract Legal question - Posted by Randy (SD)

Posted by Randy (SD) on October 14, 2003 at 09:30:19:

The original seller would not be able to refinance the property with the land contract in place, as a title search would reveal the L/C if recorded.

The 2nd question is moot.

import · October 14, 2003, 11:54am

Re: Land Contract Legal question - Posted by DavidV

Posted by DavidV on October 14, 2003 at 11:54:57:

One can refi with a recorded L/C. You just have to find a bank that will do it knowing the DOS deamon has been turned loose.

import · October 14, 2003, 11:00am

Re: Land Contract Legal question - Posted by Alan

Posted by Alan on October 14, 2003 at 11:00:53:

What about if the land contract was not recorded?

import · October 14, 2003, 11:46am

Re: Land Contract Legal question - Posted by DavidV

Posted by DavidV on October 14, 2003 at 11:46:19:

Yes you can refi the property. There may be state specific requirements that you can’t refi for more than your buyer owes. You shouldn’t do that anyway.

If the contract is recorded it would probably vary from different lending institutions if they would refi. A local bank you have a relationship with would be a good start.

import · October 14, 2003, 11:05am

Re: Land Contract Legal question - Posted by Randy (SD)

Posted by Randy (SD) on October 14, 2003 at 11:05:38:

If the contract is not recorded NO sale took place.