risk of holding second mortgage

[tombu]

What is the name of your state? Florida
We have sold our homes by owner several times in the past. This time we got a good offer price wise however we are concerned because we are being asked to hold a second mortgage. What are the downsides..can I second leinholder foreclose if the first mortgage is being paid promptly? The offer basically has the buyer putting down no cash, just closing costs. The first mortgage though a bank would be for about 95,000 and the second motgage about 41000....41,000 is a lot to lose and this is a new one on us..any insight would be appreciated....

 

[HomeGuru]

What is the name of your state? Florida
We have sold our homes by owner several times in the past. This time we got a good offer price wise however we are concerned because we are being asked to hold a second mortgage. What are the downsides..can I second leinholder foreclose if the first mortgage is being paid promptly?

**A: yes, the 2nd can foreclose if the borrower is in default per the mortgage note.
******
The offer basically has the buyer putting down no cash, just closing costs. The first mortgage though a bank would be for about 95,000 and the second motgage about 41000....41,000 is a lot to lose and this is a new one on us..any insight would be appreciated....

**A: I would not sell to anyone with no cash down. What the Buyer is trying to do is get 100% financing at your expense.

 

[MortgageGuru]

Not only that, but the first lien holder would not allow you to do anything as far as taking the property back. You would have to pay them off in order to fully foreclose. And if you were to foreclose, it would actually hurt you because then the occupants would be left with that on their credit and hinder their ability to find suitable housing anywhere else. Not that they would have to move.

 

[amortgageman]

Here is another post on what could happen.

https://forum.freeadvice.com/showthread.php?t=184674