Posted by John Behle on August 17, 2003 at 22:19:39:
In Reply to: Does the note seller have to own the property outright? posted by Annika on August 12, 2003 at 01:59:08:
A note seller does not own the property at all. Someone who has a note owns a loan or lien against the title to a property. They have a secured IOU that they could foreclose on if needed to protect themselves.
The note owner or seller may have once owned the property, which is the case with most seller financing. BUT.. they do not own the property now.
Someone can create a note against a property they own and then sell the note, but that is a more rare scenario and most buyers will not deal in those types of notes.
When someone creates seller financing by selling a property, they do not need to own the property free and clear. They can take back a second position note in back of the existing first or create a wrap around loan.
The free articles on this site should help things be more clear. I would also recommend the free "e-course" in notes that is available over at www.papersourceonline.com