Question

NEW -> Contingent Buyer Assistance Program
[quote author="mprince" date=1252117889]This listing says this "Owners will carry. Sale subject to cancellation of current escrow" in the description. What does this mean exactly?





http://www.redfin.com/CA/Irvine/5-Harvey-Ct-92617/home/5752105</blockquote>
"Owners will carry" means that the sellers are willing to provide seller financing which is subordinate to the first mortgage loan. "Sale subject to cancellation of current escrow" means that the property used to be in escrow and fell out recently and the final paperwork at the escrow company is getting sorted out.
 
Seller financing does no necessarily mean the loan would be subordinate to the existing first mortgage. Typically the expectation would be the the current homeowner would payoff the existing mortgage and finance the loan to the new buyer.
 
[quote author="CapitalismWorks" date=1252118442]Seller financing does no necessarily mean the loan would be subordinate to the existing first mortgage. Typically the expectation would be the the current homeowner would payoff the existing mortgage and finance the loan to the new buyer.</blockquote>
It would have to be if the buyer wants to get financed by a lender. No first mortgage lender will allow seller financing unless it is subordinated to their first. But yeah, it works exactly like you described. That can be a very risky proposition for the seller (all depends on how much equity the buyer would be putting down of course).
 
[quote author="mprince" date=1252119276]Sounds like a headache that I wouldn't want to deal with.</blockquote>
Can definitely complicate the transaction a bit. Seller financing can be a good thing, especially to a buyer if it is not too ownerous.
 
[quote author="usctrojanman29" date=1252119179][quote author="CapitalismWorks" date=1252118442]Seller financing does no necessarily mean the loan would be subordinate to the existing first mortgage. Typically the expectation would be the the current homeowner would payoff the existing mortgage and finance the loan to the new buyer.</blockquote>
It would have to be if the buyer wants to get financed by a lender. No first mortgage lender will allow seller financing unless it is subordinated to their first. But yeah, it works exactly like you described. That can be a very risky proposition for the seller (all depends on how much equity the buyer would be putting down of course).</blockquote>


The owner could payoff the existing mortgage, then take back paper from the buyer. No bank involvment after that.
 
Didn't this used to be a scam in the 80's? Owners would carry the paper, but with incredibly tight restrictions on late payments and default clauses that prevented any curing of the loan if a payment was even one day late, resulting in the paper holder foreclosing and reselling the same house 2-3 times a year and pocketing the down payment from each new buyer?
 
You must log in or register to reply here.
Back
Top