If the buyer defaults on the payments, the seller can repossess the property.
That's because
if the buyer defaults on the first lien, you would be responsible for making up all back payments on both mortgages, plus all future payments until the primary mortgage holder forecloses.
Not exact matches
If there's not a single
buyer that will take
on both the assets and liabilities without the government assuming private
default risk, Bear's assets should be put out for bid, Bear's bonds should go into
default, and by the unfortunate reality of how equities work, Bear's shareholders shouldn't get $ 2 - they should get nothing.
If you acquire a FHA Loan to purchase a home, the FHA is not actually lending money to you, the
buyer; the FHA simply guarantees the lender in case you, the borrower,
default on your mortgage payments.
If there's not a single
buyer that will take
on both the assets and liabilities without the government assuming private
default risk, Bear's assets should be put out for bid, Bear's bonds should go into
default, and by the unfortunate reality of how equities work, Bear's shareholders shouldn't get $ 2 - they should get nothing.
In addition,
if the
buyer runs into any financial issues they are more likely to make payments
on their primary residence before a second property so the chance of
default is higher.
Moreover, something that gets lost in the arguments about credit quality is that the second - best predictor of mortgage
default was how much skin in the game these
buyers had, and even
if Canada is not as risky as the US
on lending to people with poor credit scores, we are awash in high loan - to - value lending (with its explicit government backing).
If both parties have previously agreed to liquidated damages, the money the seller receives for the
buyer's
default could be limited to the actual deposit
on hand.
Gumley Haft Kleier, Inc. v. Bildirici (301 A.D. 2d 390)-- no commission was due under brokerage agreement providing that a commission «shall be payable at closing of title» but that seller would be liable for a commission
if the transaction did not close
if the failure to close was attributable to seller's willful
default; sale did not occur as a result of the
buyer stopping payment
on his deposit check and refusing to proceed to closing and therefor failure to close was not the consequence of any willful
default by seller.
• The seller's deposit would be credited toward the commission • Commission would be payable upon transfer of title • Commission would be payable
if the title didn't transfer based
on any action or
default of the
buyer
Still,
if a conventional lender takes a pass
on your would - be
buyer and you decide to assume that role, it is incumbent upon you to structure the deal properly — as a protection against
default and in case you decide to sell the note to an investor later.
Additionally,
if interest rates continue rising based
on the fear of a debt
default, sales may suffer, and anxiety about the state of the economy overall may stall potential
buyers from moving forward with their house hunt.