Legal Question in Banking Law in Tennessee

Second mortgage on real estate

I am the second mortgage holder on a building. The property has been sold to an individual, the bank had previously told me that they would allow me to draw 12 % of the net proceeds to satisfy part of the second mortgage that I hold. Now that the property is ready to close, the bank has decided to let me have only 7% of the proceeds. The property in question is tied in with another parcel that I also have a second mortgage on behind the first mortgage holder which is the same bank. The bank told me that if I did not release the property in question for the 7% they would repossess the property from the present owner and sell to the buyers on contract now at a later date and cut me out all together, or I could bid it at auction and pay their mortgage off in full. The buyer on contract now has offered $40000.00 moren than the property appraises for. They are trying to leverage me into taking less for my second mortgage and applying the extra money to the other property tied in to the property that is already contracted to be sold. CAN THEY DO THAT??


Asked on 7/23/08, 7:42 pm

1 Answer from Attorneys
Anthony Bradley The Bradley Law Firm, PLLC

Re: Second mortgage on real estate

You need an attorney to review the documentation and contact the bank on your behalf. To answer your question, they can do that, if you agree. However, this is the time to negoitate and investigate counter claims.

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Answered on 8/03/08, 10:13 am


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