can I take out a rehab loan if I own a property "subject to" I have the deed but the mortgage is in seller's name
2 Answers from Attorneys
Thank you for your LawGuru question. I would need more information before I can answer the question. Please feel free to contact me ASAP so that we may explore your options and protect your legal rights. 973-921-0600.
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From your question, it sounds as if you could be in serious danger of losing your property. Was your deed recorded? without that, no one knows that you are the owner.
If the seller doesn't keep up with mortgage payments, the lender will foreclose on the property. Also, if the mortgage was from the seller, the fact that the property has been transferred is probably a violation of the terms of the mortgage, and could trigger rights of the lender under "due-on-sale" provisions. That means the lender could require the entire amount to be repaid immediately.
Assuming that you are the legal owner, and assuming that the first mortgage is still a lien on the property, it is doubtful that a lender would provide you with a mortgage, rehab or otherwise. Most lenders want to have a first mortgage position, so that theirs is the only or primary interest in the property.
This response is not legal advice, since I do not have all of the information that would be required, and I do not have a representation agreement with you.
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