Posted by Patrick S. Lawson on October 29, 2005 at 12:06:57:
John made a great point that needs to be addressed…Subordiation.
“It might be possible to ask the present holder of the 2nd to extend a fresh 2nd after a refi of the first.”
Nearly every lender I work with REQUIRES that the seller 2nd be subordinated. You may be able to get an exception based on the size of the second, but as John pointed out lenders generally don’t grant this exception.
The seller should re-subordinate their second without being paid off, but that is largely dependent on your skills as a negotiator and the note holders disposition.