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OT -Need to file a private mortgage??
On Fri, 30 May 2008 21:23:22 -0700, "Tim" wrote:
Or they could run up a bunch of credit card bills and have the credit card company file a lien against the house -- so what that they would be in first position and the only way you could retain you interest would be to buy out the credit card company. Nah. Just a handshake should be fine. Yeah, but if we have a signed and witnessed document/mortgage and promissory note, what is the advantage of having filed the mortgage vs each of us having a signed/witnessed/notarized document?? Lien Position is the key. What could happen? The other poster explained some of the pitfalls of not 'protecting' your lien position. If the person you are giving the mortgage to has any financial hardship down the road and the house gets liens on it, they will be in position to get paid first. You, without a recorded interest (lien position) in the property, would not get any money; until those who file their suits get paid first and are in position. You want a First Position Lien (First Mortgage). RECORD IT! Good luck with this journey. You have already pointed out that they couldn't get a good interest rate as it is, so that must mean their credit is already shaky. Do you really want to be left out in the cold should they go somehow further down a credit problem path? Rough example only..... $ 75k Mortgage $ 25k Credit Card Debt $ 25k Car Note $ 50k Hospital Bills Unpaid Hospital puts a lien on house, car people decide to sue and put a lien on the house. Your buyer now decides to just go into bankruptcy, so now the credit card companies are looking to get in line. House gets sold at foreclosure for $100k. Hospital was in line first for their $50k Car people got their $25k And the credit card company squeaked by for their $25k. Excellent! They went bankruptcy and all creditors got paid. Oh wait, you didn't know their was a bankruptcy until after it happened? Bummer, you would have been notified of your buyer's credit problem if you had a recorded mortgage as FIRST LIEN POSITION so you would get paid FIRST. Rough example above, but you get the point. Hopefully.... And to add to this, your relative will tell you that he had no choice. And I think he'll be telling the truth. Once the other liens are filed, and they will be filed promptly, which could be months before the house of cards falls down, there will be no way for him to sell the house and pay you before he pays them without breaking the law. Maybe no way to do it at all. BTW, Pat gave several examples of this problem in his reply. You need to read his reply again. as well as Erma and Tim's. |
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