Well one thing I could do is get the current mortgage holder to allow the conversion and move the lien to the condo still owned by the original owner of the 2 family.
They are keeping one of the units as their home. Currently they have 2 mortgages totaling more than the value of the remaining condo that they own. However if they payoff the Home Equity Line of Credit the proceeds from the sale of the other side of the house they are making a condo, then the existing first mortgage is less than 75% of the value of the condo they are continuing to live in. Confused yet?
So if I can get the existing lien holder to allow the change in property type and transfer the lien to just one of the units instead of the whole building, that might be a solution. There are, however, complications. First off, the mortgage is being serviced by a different company that the original lender, so that means dealing with 2 entities on the issue.
Also a change a property type effectively puts the mortgage in default and the lender could call in the whole note forcing the payment of the entire mortgage, which is a significant amount of money. More than the sale.
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