I am thinking about starting a private lending company at some point in the future and was just curious what would happen to the mortgage if a tenant decides to sue the landlord and wins. Assuming the tenant takes over the property, do they also assume the same mortgage payments to the lender? I understand that the Landlord could potentially lose his investment, but would the lender also be penalized for the landlord's negligence?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
5y
A tenant can’t “take over the property”….worst case scenario, they get a big judgment. It doesn’t affect you at all….no matter what happens, you are in first lien position, if payments stop, you foreclose. Nothing else that happens affects this.
A tenant can’t “take over the property”….worst case scenario, they get a big judgment. It doesn’t affect you at all….no matter what happens, you are in first lien position, if payments stop, you foreclose. Nothing else that happens affects this.