Posted by Bob-Tx on August 23, 1999 at 20:06:46:
Why not just specify in special provisions that the second will be paid in full upon resale of the property and on or before 1/1/2000? The seller has to make a call whether or not they want to provide the second - that should be based upon your good credit, the LTV on the house (if you don’t pay it they can foreclose), etc. There’s not really any way you can “insure” that the $10k will be paid. I wouldn’t think assigning the note is a good idea…just pay it off when you close on the resale.
Just my .01.
Question on Second Mortgage - Help, experts! Thanks - Posted by Rick
Posted by Rick on August 22, 1999 at 07:51:00:
Here is my situation.
1 - I offered to buy a home for $71,000, with $61,000 cash at closing and a $10,000 balloon second payable in January, 2000.
2 - I have a contract to sell the home to the ultimate buyer (“Buyer B”)and will assign responsibility for the $10000 second mortgage payment to them. The $10000 is part of a severance package that my buyer is getting from her employer, and she has documented evidence of such.
Two questions. 1) The listing agent indicated that the original sellers of the property would not go for the second unless it could be shown that the $10000 was definitely going to be paid to them in January. The fact that my buyers had evidence that the money was coming to them was not sufficient. Any ideas? 2) How should I go about assigning my second to “Buyer B”?
Thanks in advance for any suggestions.
Re: Question on Second Mortgage - Posted by JPiper
Posted by JPiper on August 22, 1999 at 09:29:34:
Your post confused me. Initially I assumed you had a contract with the seller, since you said you had a contract with the buyer. Then you say the listing agent says the seller will not accept a second without proof of payment in January?..so I start to think you don’t have a contract with the seller. Which is it?
If you do have a contract with the seller, and it already provides for a second to be paid by you, then I’m not exactly seeing the problem here other than the risk that Buyer B may not pay you so that you can pay the seller in January.
If you don’t have a contract, or you don’t have a contract that provides for a second as part of the purchase from the seller, then the seller is certainly not obligated to wait until January for their $10K. On the other hand, I can’t imagine what better proof of payment there could be. They have a note indicating a balloon in January??and you could assign this note to THEM at closing along with a copy of the severance package indicating the money will be there. The ONLY risk the seller would have is that Buyer B would decide not to pay?.and that’s one step better than most notes in which you would not know that the money would actually be there to pay.
Perhaps you should provide some clarity here?.unless it’s just me that isn’t clear.
Re: Question on Second Mortgage - Posted by Rick
Posted by Rick on August 22, 1999 at 22:09:01:
Sorry for the lack of clarity. I have presented an offer to the seller with a $10000 ballon due 1/2000.
Any other thoughts on legally ensuring that the second mort. dollars get in the sellers hands. I wonder if my buyer could direct her firm to forward the funds directly to the seller?