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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Pitfalls of seller financing 2nd loan. Posted by jmac on May 17, 2009 at 4:59 PM In Reply to: Pitfalls of seller financing 2nd loan. posted by Sara_CA on May 17, 2009 at 6:11 AM These Seller Financing articles are definately worth your time reviewing: http://www.jmacfunding.com/articles.htm This one in particular regarding seconds: http://www.jmacfunding.com/Seller_Financing_Tips_for_creating_seller_carryback_2nds.htm -jmac : Subject: Pitfalls of seller financing 2nd loan. : I am selling an agricultural land near town. My buyer is paying $600K for the property, agricultural credit agency will finance my buyer for $200K, 33% in first position by letting my buyer assume my existing loan with them. No new loan. Buyer will pay 25% down, $150K. I must finance remaining 42%, $250K in 2nd position in order to make the sale. Would you do it if it were you? : Even though my buyer has excellent credit score (740), I am not in anyway comfortable about doing a large loan in 2nd position. Can someone list the pitfalls of carrying a 2nd position loan again? I do want to sell. But are the pitfalls of doing a large 2nd position loan big enough for me to walk away from this buyer. : I cannot finance him in 1st position. But several experts in the main board have given me food for thought on how to deal with the 1st’s due-on-sale clause if the buyer defaults and I had to foreclose on him and get the property back. I would be unable/unwilling to pay off the first if the lender call their loan due. Since the lender must rewrite my loan to name my buyer as the new debtor anyway, can I ask the lender to include the language such that the due-on-sale clause is NOT on the new Deed of Trust? Something to the effect of “should the ownership of the property change hands due to default of secondary liens, lender agree to finance the new owner by allowing the new owner to take over the loan by stepping into the position of the borrower where he left off”? : Can this be done? Will such language in the Deed of Trust hold up in court? : Btw. This property is in CA near college town. Sell price is $600K. Correctly priced for agricultural land. Under priced for future development land. : Thanks for any expert insights in advance. Thanks Ward for this great board. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : These Seller Financing articles are definately worth your time reviewing: : http://www.jmacfunding.com/articles.htm : This one in particular regarding seconds: : http://www.jmacfunding.com/Seller_Financing_Tips_for_creating_seller_carryback_2nds.htm : : -jmac : : : Subject: Pitfalls of seller financing 2nd loan. : : I am selling an agricultural land near town. My buyer is paying $600K for the property, agricultural credit agency will finance my buyer for $200K, 33% in first position by letting my buyer assume my existing loan with them. No new loan. Buyer will pay 25% down, $150K. I must finance remaining 42%, $250K in 2nd position in order to make the sale. Would you do it if it were you? : : Even though my buyer has excellent credit score (740), I am not in anyway comfortable about doing a large loan in 2nd position. Can someone list the pitfalls of carrying a 2nd position loan again? I do want to sell. But are the pitfalls of doing a large 2nd position loan big enough for me to walk away from this buyer. : : I cannot finance him in 1st position. But several experts in the main board have given me food for thought on how to deal with the 1st’s due-on-sale clause if the buyer defaults and I had to foreclose on him and get the property back. I would be unable/unwilling to pay off the first if the lender call their loan due. Since the lender must rewrite my loan to name my buyer as the new debtor anyway, can I ask the lender to include the language such that the due-on-sale clause is NOT on the new Deed of Trust? Something to the effect of “should the ownership of the property change hands due to default of secondary liens, lender agree to finance the new owner by allowing the new owner to take over the loan by stepping into the position of the borrower where he left off”? : : Can this be done? Will such language in the Deed of Trust hold up in court? : : Btw. This property is in CA near college town. Sell price is $600K. Correctly priced for agricultural land. Under priced for future development land. : : Thanks for any expert insights in advance. Thanks Ward for this great board. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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