Posted by rm on September 17, 2003 at 07:17:20:
What I mean is, they pull out their credit cards, get a cash advance, and put the junk debt back where it belongs- on their credit cards, thus paying off the second which was only created to pay that debt off in the first place.
Subject To- - - & HELOC - Posted by LittleGuru
Posted by LittleGuru on September 15, 2003 at 13:04:06:
I’m getting calls on my bandits but it seems as if everyone has some sort of second mortgage HELOC or some other way they tapped into their equity. How do you deal with this? Do you take the deed subject to the first and second mortgages if the numbers still work? What are the other options?
Thankyou
Re: Subject To- - - & HELOC - Posted by rm
Posted by rm on September 16, 2003 at 08:26:39:
If they’re behind on the first, it’s very common that they’re actually current on the second…
You could, in that case, short the second. Somebody recently replied to a posting of mine, saying that they had actually shorted the second and re-instated the first. Then, you could take the home sub2. And the numbers would work.
What you’ll find is that most of these folks took out the second to pay off junk debt.
What I do is ask them, “What did you do with the money that you got with the second mortgage?”
It’s almost always for something unnecessary.
My reply is, “So what you’re saying is, you’d like me to buy your home at a fair price, and then, pay off your (credit cards, trip to the Bahamas, etc.)?”
“That doesn’t like a very fair deal… would you do that?”
Then, I go on to tell them that I can buy their home, but I can’t pay for their [junk debt] as well. If they’re willing to take back that debt, and pay it as before, then we can proceed.
Re: Subject To- - - & HELOC - Posted by Jim FL
Posted by Jim FL on September 15, 2003 at 17:16:19:
Little,
Sure, if the numbers work, I’ll buy a house with two mortgages on it.
However, most times they do not, because the second mortgage is rather new, leaving virtually no equity in place.
With regard to a HELOC, NO, do not buy with this in place.
You would be asking for trouble.
Instead, have the sellers close the account, and convert it to a second mortgage, not an open equity line.
done all the time, all the sellers need to do is contact the lender and ask to have it done.
Good luck,
Jim FL
Re: Subject To- - - & HELOC - Posted by Ed
Posted by Ed on September 16, 2003 at 18:05:00:
Not sure what you mean about “If they’re willing to take back that debt, and pay it as before”. If they have a 2nd how can they take back that debt? If you mean to have them pay the 2nd wouldn’t that be risky as they could stop paying?