Seller has a second loan lien hold. Who’s responsible?

UPDATED: May 27, 2009

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Seller has a second loan lien hold. Who’s responsible?

I put an offer on a home. Then selling agent brings up 2nd loan. Bank has offered to settle with current owner and in return they have asked me to contribute. Do I have to help to buy the house? What happens to 2nd loan?

Asked on May 27, 2009 under Real Estate Law, California


B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

I'm not a California lawyer.  But it sounds to me like, when you boil it down, you're being asked to pay a higher price than your contract to get this house.  If you're really interested in this particular house, and it's a small amount, you might consider it, but I don't think you can be required to do it.  If the seller can't close, at the contract price, and deliver title free of the second mortgage lien, your lender won't give you the money, because it would end up with the old second mortgage still a lien on the property, and it would become first, because it's oldest.

As far as getting out of the contract -- and there are plenty of other houses on the market where you don't have to deal with this -- you should get your deposit back.  If you don't already have an attorney representing you, it's time, and you can find qualified lawyers in a number of places, including our website,

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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