In other words they used you to create money by taking your house as collateral.

If a lender is placing a lien on another collateral property to secure their 100% loan, that is very reasonable.  

@Yvette Hirsch,If this is a property that you owned and obtained the original mortgage on, then you are still liable for the mortgage payments and it is not defunct.When you enter a contract for a mortgage, the bank is extending a loan to you personally AND putting a mortgage on the property as collateral.In your case, the property can no longer be used as collateral, because the mortgage against it was removed during the tax lien sale.  

As long as your math is good and you can put in maybe 25% of the cost of improvements, they should be able to fund the rest.If you don't have the downpayment and can't persuade the banks to accept the land and existing building as collateral, you might want to flip the property for a quick $50k or whatever to an investor who will do the work.Just thought of a possible red flag... what is the state of title?

If you do have assets, I would look into using them as collateral for the loan you need.

Hi-Seeking to give out loans to property owners who hold the property in an LLC (multi-member, if that's relevant at all). For anyone's who's done this...-Does it make a difference if the loan is made out to the LLC v...

There could be so much goodwill that the building will not fully collateralize the loan and additional collateral would be needed.For the seller note to count as equity for your loan it must be on standby (no payments) for the life of the loan.

Do any of you use third-parties to help with diligence and reviewing collateral files? 

But, larger banks or institutions usually have stricter written loan policies, so it's finding that flexible lender.Another use for such properties is as cross collateral assignments for seller financed deals.

The entry amount to be paid for the collateral goes to the balance of the loan and allowed costs of collection under state law.