09-16-2010 07:59 AM
An owner in Palm Beach Gardens, FL owns a house that has a 1st mortgage and a home owner equity loan both collaterized by the home. He moves and buys another house because of a job change. He is under water on the FL house but is current with all his payments. He wants to sell the FL house but an offer will only satisfy the 1st mortgage and not the home equity loan.
He asked the bank who is the lender for both the 1st lien and 2nd lien (equity loan) to accept a Short Sale on the FL house. As an alternative, he wants the bank to transfer the equity loan to the 2nd house which he claims he can continue to pay. The bank has told him NO and that they will foreclose on the FL home if both the 1st mortgage and equity loan are not fully paid on the FL house.
I believe you cannot transfer the collateral for one house to another house, but don't know why. I've suggested the owner take another equity loan on the 2nd house and payoff the equity loan on the 1st house.