What Best Describes a Silent Second Mortgage

Key Takeaways A silent second mortgage refers to a second mortgage on an asset such as a home that the borrower uses to pay for the. Luckily there is another type of silent second mortgage that is totally legit.

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The silence refers to the absence of full disclosure to the first mortgage lender.

. Fraud or illegal actions can occur when a second mortgage is used to fulfill the obligation of the down payment without being reported to the lender. But what is different is that the first lender is not told about it and is also not disclosed on the hud-1 settlement statement for the first mortgage. When you take out a loan in addition to a mortgage in order to make a down payment this is called a silent second mortgage.

Which of the following best describes the Home Mortgage Disclosure Act. Silent second mortgages are used when a buyer cant afford the down payment required by the first mortgage. In other words your lender has the right to take control of your home if you default on your loan.

On November 26 2006 the Orlando Sentinel published an article entitled Hear this loud and clear. Below is a primer on silent second mortgages the risks pitfalls and how to legally take out a second mortgage on a property. Mortgages on two or more pieces of property are called second mortgages.

The Silent Second Revisited. OK now a warning. The second might bear no interest and might not be repayable until the first mortgage is repaid or the property is sold.

What is a silent second in real estate. But in this case the term silent describes the fact that you dont have to. As in the case of a.

The term silent mortgage synonymous with silent second is one that I hadnt heard for nearly a decade. A silent second mortgage is a second mortgage placed on an asset for down payment funds that are not disclosed to the original mortgage lender. Enter the silent second mortgage a loan provided to a home buyer in order to cover the down payment says Joseph Tsentner a mortgage loan officer with Freedom Mortgage in New York.

Legal silent second mortgages are designed to help deserving homebuyers afford a home. However the borrower has actually borrowed the needed funds from the seller via an undisclosed and unrecorded ie silent second mortgage. In the fraudulent activity termed silent second a primary lender grants a loan to a borrower who the lender believes has invested hisher own money in the down payment and closing costs.

Down-payment assistance DPA If you do not have the money for a down payment there are over 2000 down payment assistance programs across the country offering grants often referred to as silent second mortgages. And while a silent second mortgage may sound like a nice deal there is a right and a wrong way to do it. Silent second is a kind of second mortgage note which is made at the time the first mortgage note is prepared and the buyer is not able to come up with the required amount of down payment.

A For HMDA to be effective it relies on the accurate and timely reporting from participating lenders. For example a labor union may offer members who are first-time home buyers a silent second to finance closing costs or the down payment. Now it being silent has far a different meaning that the first kind of silent second mortgage.

A silent mortgage is fraud The article was written by syndicated columnist Robert Bruss Inman News. A second mortgage offered at preferential subsidized terms to those who qualify. However the borrower has actually borrowed the needed funds from the seller secured by an undisclosed and unrecorded ie silent second mortgage.

The term silent second is used most frequently to describe self-serving or perhaps fraudulent schemes where house sellers accept second mortgages as part of a sale transaction without the full knowledge of the first mortgage lender. What Is A Silent 2Nd Mortgage. Moreover the primary lender is made aware of this down payment assistance.

It is considered silent if that second mortgage or loan is used to secure down payment funds and then not disclosed to the original mortgage lender prior to closing. It is silent because this secondary mortgage only becomes due once the primary mortgage is completely. A lien is a right to possess and seize property under specific circumstances.

If a home buyer secretly takes out a second loan from a different lender or a private investor to cover their down payment its considered a silent second mortgage. It is considered silent if that second mortgage or loan is used to secure down payment funds and then not disclosed to the original mortgage lender prior to closing. Borrowers who do not disclose the existence of a silent second mortgage to the first mortgage lender could be fined and.

Silent mortgage involves the use of the second mortgage or loan to secure down payment funds but has not been disclosed to a mortgage lender in advance. A second mortgage is an additional mortgage on one piece of property. A silent second is a form of mortgage fraud whereby a primary lender grants a mortgage loan to a borrower believing that the borrower has invested his or her own money in the down payment and closing costs.

In the fraudulent activity termed silent second a primary lender grants a loan to a borrower who the lender believes has invested hisher own money in the down payment and closing costs. Like a sleeping bear long-silent second mortgages hibernate in peoples houses these days. Silent seconds C Stated income loans.

Non-conforming because it is a Second Mortgage and that falls outside the Frannie Mae - Freddie Mac guidelines. In some cases the term silent second mortgage is used to describe a fraudulent practice you should avoid at all costs one that might seem on. And it can be bloody when those sleeping mortgages awaken hungry and look around for something to fill its pocket.

This is because the existence of this loan is being kept hidden from the first lender which is illegal. After the three-year residency requirement is met the soft second mortgage is released by HUD and a mortgage satisfaction letter is filed with the county recorders office. They are quiet a snoozing predator just waiting for spring.

In some cases the term silent second mortgage is used to describe a fraudulent practice you should avoid at all costs one that might seem on the up-and-up. A second mortgage is a lien taken out against a property that already has a home loan on it. However the borrower has actually borrowed the needed funds from the seller secured by an undisclosed and unrecorded ie silent second mortgage.

A second mortgage is an additional mortgage on one piece of property. The second mortgage is called a soft or silent second mortgage and is closed immediately after the first loan yet homeowners only pay on the first mortgage. Silent second mortgages pose a risk for.

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