Hidden 2nd Mortgage Found 2 Days Before Close

[Ryan Hickman]

My fiancee' and I were about to close on a house when the seller's lawyer notified us that the seller had a 2nd mortgage on the house which he owes money on. Apparently the seller's loan company got bought by another company and the seller believed the loan was forgiven since he stopped receiving notifications of due payments. Whether or not the seller's story is true is a different topic but in this scenario should I be worried as a buyer? Can I leverage this to my advantage at-all to get a better investment? If the loan company demands payment and the buyer's do not have it I think the sale will be cancelled by the sellers and the home will become a short-sale for the loan amount + appraisal?