mortgage question

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hello, we found a house, made an offer. The owner accepted and we had home inspected. Every good. We are on track with insurannce, finacinng, escrow etc. Expected to close in two weeks. Well tonight my realator called me with some bad news. Come to find out the owners have a second mortgage on the home and didnt disclose that. They already have another home and selling the vacant one. Apperntley didnt know the second mortgage was on the vacant one. So my offer wont pay off both mortgages. Im not willing to pay more for the house. In fact im clear to back out. My realator said that the owner has some options. They could transfer the second mortgage to the home they live in now or they can do a personal loan. Worst case they can talk to bank and try to short sale. Shes going to keep me posted on what they are going to do. Can a peson transfer a second mortgage on one home to another home. Am I wasting my time hoping to get this house? Thanks

jameshogg · Posted: Tue Dec 30, 2008 11:20 pm Post subject:

Hi joshuajay,

I don't think a person can transfer a mortgage from one home to another. In my opinion the lenders won't agree to do this. There are high chances that the property goes for a short sale. It will be better if you can look out for other properties in the area. If you get a house which you can afford, you should purchase that rather than wasting your time on this property.

Thanks

Caron · Posted: Wed Dec 31, 2008 3:36 am Post subject:

Hi joshuajay,

In general, one cannot transfer a second mortgage from one home to another. What the owner means perhaps is, he'll take out a new mortgage against the other home and pay off the second loan. This is a feasible option.

As far getting a personal loan is concerned, well, the owner can go for that too. But it's not clear as to what he would choose finally because he has also thought of taking to the lender about a short sale. So, I feel, you shouldn't waste your time here. Just move on and look out for some other home.

By the way, have a great new year ahead! Smile

Good luck

gmakerley · Posted: Wed Dec 31, 2008 8:11 am Post subject:

yes, the owner of the home can work out the situation with his lender. yes, you might be able to purchase this home after all under the original terms.
in all probability, you can back out of this deal without penalty, if only because your seller neglected to disclose all details. that's only an opinion, of course. the truth of the matter is that you'll be wise to consult with your real estate attorney to make that determination.

here's another lesson: we need to keep track of what we do. if we take a second mortgage, we certainly ought to be able to remember on what house the lien is being placed.

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