Posted by Brent_IL on October 01, 2003 at 14:15:31:
Anything?s possible. How probable, I don’t know.
You are changing the collateral that secures the mortgage that you took over subject-to. You won’t get anywhere without the lender’s cooperation. The original owner or trustee, if any, will have to be the one negotiating with the lender since they don?t know about you. The first challenge is to convince the bank that their loan is just as secure with a blanket mortgage on two properties as it is now and that it is in their interest to accept this premise. You’d have to explain why you want to subdivide. Unless the interest rate is extraordinarily high, and the value of one-half of the property has appreciated greatly, I can?t see this being approved by the lender. I think they would call the loan when they find out rather than jump through hoops. I?d be leery of doing a L/O and giving someone rights to purchase when the likelihood of having to re-finance is high. Any option strike price should take possible new loan costs into consideration.