The moment I read your post I suspected it was Chase! Messed up r/e schedule have been the norm, more than the exception, on their loans I have signed, and I have signed many.
However, that doesn't necessarily mean its "creative" financing. As you likely know, LTV (loan to value) is the determinant. You didn't mention the new loan amount. Is it over $500k? If so, any chance the second and/or heloc was for a major remodel? If so, there may have been an appraisal at that time.
Speaking of appraisal, did borrowers tell you there was no appraisal? Perhaps an AVM (automated valuation model) was used and found sufficient to support their loan request.
I am not saying your suspicion isn't correct in this case, Yoli, but before I could draw that conclusion, I would need more information than presented in your post.
as an aside: creative financing doesn't necessarily mean something nefarious or fraudulent  Using the equity in a SFR to invest in other projects can be wise as well as advantageous.
On the other hand, if the new loan is for, say a million, then yes, I might have a hard time keeping my eyebrows in normal position! |
