Older house usually have elctrical, plumbing heating and insulation deficiencies, and hazards as mentioned above.

However, the city showed up a few months ago and handed the new owner a 6 page report of deficiencies. 

I had one for years that was awesome and last year he fell off the wagon and I was glad to be there to catch all the patch jobs, material wastage, small deficiencies ie: missing outlet covers, doorstops, strippings which you really don’t catch if they are behind furnishes.

The lender may remain on the hook for any deficiency not insured.

It's an expensive product as the collateral is deficient and would require a lender to first foreclose THEN force a partition action.Would you lend on part of a car or truck?

Regarding the deficiency...I'm not sure but I believe that if the second was a line of credit or cash-out refi, unless the proceeds were used to upgrade or repair the home, he may owe taxes on that money.

You will also be barred from any deficiency if the property sells for less after you take it back.

My voted us thumbs down, although the OP seemed to want to get yes rather than the unanimous no's he received.Here's my take: additional non-cash collateral might make up for deficient security deposit, but that's it.

Then putting the appraisal under a microscope and requiring addition information.Or, is it a borrower deficiency where the borrower can't pay the aount as agreed?

Additionally, you'll need a processer and one should do about 25 deals a week, so you will have a variable cost in that office depending on volume.Funding the loan can technically keeep you from the seller financing issue and in many states allow a deficiency judgment from bad debts.