Holding A Second
I have consented to loaning a homeowner $7500 to reinstate his first mortgage - his 1st is at $100k, then my second will be $7500, FMV is $160k (extremely conservative). My question is, is there something I can include in my note or mortgage that gives me some protection (other than standard recourse) in the event he defaults on the first mortgage again? the first is a private lender. what should I include so that if he defaults on the first, I have the right to satisfy the first & take the property - is there something other than standard foreclosure language?
How about a wrap-around-mortgage in which the borrwer has to pay you the first and second monthly mortgages and you pay the first?
I’m assuming you’ve done all the due diligence and confirmed that there are no other liens? And you would, in fact, be in 2nd position? And you are going to properly record the 2nd?
With that said, I agree with apexnotes that an attorney would be well worth the time and money.
I like the idea of a wrap-around-mortgage. But typically title transfers with a wrap, so I don’t know that it would work. Especially with a private lender holding the 1st. who know what kind of agreement they have.