Posted by Michael Morrongiello on February 03, 2000 at 23:43:49:
I see no need to record a performance mortgage to secure you equity in the property that your are purchasing “subject to” the existing financing. Presumably you will be getting a deed from the seller that is “subject to” that financing. You will have legal title to the property. The danger of course is the infamous “DOS” due on sale clause which the lender might call due. Recording a mortgage won’t necessarily protect you from that happening.
As for recording a performance mortgage to secure you interest where you have an OPTION that is a different story. Here they are valid concens over the seller further encumbering the property with more debt or simply not making the mortgage payments that are due on the existing loans against the property thereby jeopordizing your option. A performance mortgage or a simply mortgage securing your option position would alert you to those events unfolding.