How can i tell the difference between a refi and a 2nd mortgage?

Question

Hello BP community,

I've been doing lots of driving for dollars and while researching the properties I'll sometimes see multiple loans since the last purchase date of the property. I wanted to see if there was a way to see if those loans were the seller refinancing or taking out second mortgages.

So for example lets say the last purchase was 20 years ago for 70k but in 2001 there was a mortgage for 100k and latter in 2006 there was another one for 130k .

If these are refinances that fine but if they are multiple loans that puts the property at 230k making it pointless for me to pursue as in many cases as the owner would owe more than its worth.

Thank you in advance,

Jorge Rullan · Answer

I would go the clerk of the court and look at the property records.  That way you can see what promissory notes, leans have been filed on the property.  If it's a property you are interested in, you can always have a title company do a check for you.  Good luck.

Richard Scholtz · Answer

Good question Ivan....I guess you see if their were any re conveyances filed after that date....cause once they are paid off they are supposed to clear them.  If no re-conveyance you assume they still owe the money. Practically however...if the property is worth 150K and you see an FHA or VA loan for 140K and later another one for 130K there is no way FHA does 2nd mortgages neither does VA and the value wont support two loans those sizes. So safe assumption is it is a refinance.,,,,,,if the folks will talk to you,....then invest in a prelim title report.

Jeff B. · Answer

I am sure you will find that debt against equity is

always the sum of (all existing, non-reconveyed notes) and any sale would need to clear them all.