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Law Pro
Law Pro, Attorney
Category: Legal
Satisfied Customers: 24869
Experience:  20 years legal practitioner: real estate, collections, estate, civil, business, and criminal law
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I am applying for a refinance and when the the refinance company

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I am applying for a refinance and when the the refinance company looked into my original mortgage, which is an 80/20. They found that the original loan company had never officially filed the 20% loan. So, the refinance can't happen until they get that done. So now, after 2 months of pushing it off, they are finally saying that they found the mistake, and are rewriting the loan, and that I have to resign it again. That just doesn't seem right to me.
The mortgage company wants you to "resign" or execute documents correcting the original mortgage - correct?
Customer: replied 3 years ago.

yes they do. Since they really don't communicate with me, I am just going on what the refinance lender is telling me.



First, pursuant to the original documentation you signed - basically if there is a problem with the documentation you are responsible at the request of the lender to execute any documentation necessary to comply with the loan.

Second, in an 80/20 loan - the first loan is for 80% of the purchase price. The second loan, for 20% of the purchase price, works as a revolving line of credit usually for 15 year term and then must be paid in full over the course of the last 10 years of the loan term. The first loan prevents the borrowers from having to take out a private mortgage insurance (PMI) policy, which helps them save money. PMI is usually required when any mortgage covers more than 80% of the home value, because it is a risk for the bank. The insurance works to protect the bank, but since the cost is passed on to the borrower, it makes it harder for the borrower to handle.

Third, if they don't have the 20 loan correctly documented nor filed - then it isn't a lien against the property but only an unsecured personal debt of yours IF you did execute the original loan document for it.

If you are not having financial problems I would just do as they request to expedite the refinance of the property.

If you are having financial problems then I would think about filing a bankruptcy and discharging the debt along with any other unsecured debt you owe.

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