Posted by Mike on May 06, 2011 at 15:44:12:
Thanks John.
Is an escrow account of sorts the best way to make sure this occurs?
Question on Mortgage Scenario - Posted by Mike
Posted by Mike on May 05, 2011 at 13:54:58:
Hi here is a scenario I am wondering about.
Bank owned property at value of $500,000
Mortgages of $200,000 and and $100,000
Buyer1 gets a private loan for $350,000 and pays off bank. Gives Lender 1st mortgage on the property.
Buyer1 now decides to advertise the property for sale and take a private mortgage on the property from Buyer2.
The big question, is Buyer2 out of luck if Buyer1 does not pay on the loan from Lender. Won’t Lender foreclose on the 1st mortgage and Buyer2 would be out on the street?
Re: Question on Mortgage Scenario - Posted by John Hyre
Posted by John Hyre on May 06, 2011 at 11:39:57:
Correct, which is why Buyer2 wants to either make payments directly to Lender, or be able to verify that payments are being made coupled with the ability to make those payments directly to Lender and get credit as if paid to Buyer1 if Buyer1 misses any payments.
John Hyre