Undivided interest in real property - lien?

[sdb720]

What is the name of your state? Texas

Can a 2/3 owner of undivided real property (tenants in common) borrow money against the property with a lien/mortgage being placed on the property without the 1/3 owner's knowledge or consent?

[divgradcurl]

Originally Posted by sdb720

What is the name of your state? Texas

Can a 2/3 owner of undivided real property (tenants in common) borrow money against the property with a lien/mortgage being placed on the property without the 1/3 owner's knowledge or consent?

In principle, yes -- if you could find a bank or someone else to loan the money. The 2/3 owner can only mortgage what he or she owns, which is 2/3 of the property; in such a case, a bank would have limited recourse if the 2/3 owner defaults, because the bank can't foreclose on the entire property, and can't sell the property without the 1/3 owner's permission or a court order.

[nextwife]

Exactly. The recourse available to the lender in the event of a default is limited if the collateral is only a partial interest. Therefore, it is unlikely that a lender would be interested.

[seniorjudge]

A normal lender (if there is such a thing) would not loan money under this scenario, but I know lots of individuals who would take such a chance.

[HomeGuru]

Originally Posted by seniorjudge

A normal lender (if there is such a thing) would not loan money under this scenario, but I know lots of individuals who would take such a chance.

**A: even an abnormal lender would not lend under those circumstances.

[nextwife]

Originally Posted by HomeGuru

**A: even an abnormal lender would not lend under those circumstances.

But a really stupid, uninformed lender might.