Legal Question in Real Estate Law in New York

Second Mortgage Not allowed

I am owed some money that is secured by a mortgage that I just recorded today on the persons two houses. It won't show up for about three to four weeks.

I will have problems collecting on the mortgage anytime soon without a courtbattle because of the wording in the mortgage allows my so called friend (Soon to be X friend)to take his sweet time trying to refinance with his 490 fica score.... but that is another story.

I just found out that the bank Ponce Deleon that holds the first mortgage does not allow second mortgages.

My question...Is it possible that if they find out they would call the mortgage forcing him to refinance therby allowing me to get paid back my money without litigation on my part.

Thanks for your help....


Asked on 2/01/05, 11:36 pm

3 Answers from Attorneys
Kevin Connolly Kevin J. Connolly

Re: Second Mortgage Not allowed

Hello, Nick :-)

Maybe they would foreclose; maybe not. It's worth a shot. You might open up with a letter to the Bank asking for a statement of his tax escrows so that you will know whether you need to monitor the taxes. There are other angles, but they entail litigation.

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Answered on 2/02/05, 6:21 am
Walter LeVine Walter D. LeVine, Esq.

Re: Second Mortgage Not allowed

Not trying to berate you, but it sounds like you did this transaction informally, without an attorney to assist you, which may be why you are in this bind now. The first action, like Kevin suggested, is to contact the bank with the first mortgage and check its status, including escrows. They may or may not cancel their mortgage when they learn of the second mortgage, as their right is optional, not mandatory. Your risk is that he maintains his first mortgage, so they let him have the second, and he defaults in your payments. This will necessitate that you start a foreclosure action, and you will be compelled to deal with the first mortgage to protect your interest. Hope the first mortgage company takes some action after you contact them.

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Answered on 2/02/05, 11:16 am
Phroska L. McAlister PHROSKA LEAKE McALISTER

Re: Second Mortgage Not allowed

If the first mortgagee forecloses for something that you do; or you attempt to foreclose (if you really have a mortgage & not just a "collateral" interest) you may be "shooting yourself in the foot."

In cases where the equity is not there [yet], you could be left with just paper.

Get a lawyer and try to work this out with your "EX Friend."

Good luck,

Phroska L. McAlister,ESQ

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Answered on 2/03/05, 11:53 pm


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