SECOND MORTGAGE IMPLICATIONS UNDER NEW RULES

The first mortgage is FHA.  There is a second mortgage. Questions:

 

1.  What is the maximum amount that FHA will allow to be paid to the 2nd?

2.  May third-parties, seller or buyer contribute anything to the 2nd?

3.  Does FHA require that the 2nd release its lien AND waive the deficiency?

 

Thanks

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Replies to This Discussion

Permalink Reply by Kevin - Greenville, SC on November 1, 2013 at 6:18pm

1.  What is the maximum amount that FHA will allow to be paid to the 2nd? - 

The owner-occupant mortgagor may elect to apply the entire amount of the $3,000 consideration or a portion of it to resolve junior liens and to offset the sales transaction costs not paid by HUD (including a home warranty plan fee, costs of optional repairs, and buyer’s closing expenses). 

2.  May third-parties, seller or buyer contribute anything to the 2nd? - In my experience yes.

3.  Does FHA require that the 2nd release its lien AND waive the deficiency? - No.

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