Re: Tenant/Buyer wants security against Seller. - Posted by JPiper
Posted by JPiper on May 09, 2000 at 12:47:23:
Why isn’t your deal set up so that the payments are made to a third-party, who makes the underlying mortgage payment? Whether you are assigning or not this is simply prudent.
Recording a performance mortgage gives the tenant/buyer a way to enforce the agreement. I’m still trying to figure out why she’s worried about a $3K prepayment penalty…that’s a cost to the seller. Is this deal underwater to the point that it wouldn’t support a $3K prepayment penalty? If that’s the case, she simply needs to exercise AFTER the period for the pre-payment penalty, OR the seller will have to come to closing with cash (this is problemmatical). Even a performance mortgage can’t change the terms of the underlying loan(s). Just make sure your agreement extends beyond the time of the prepayment penalty UNLESS there is sufficient equity in the deal for the seller to pay $3K.