Owen Monie took out a second mortgage on his home to pay for his college. When he sold his home, the second mortgage information was not disclosed to the buyer, Cole Dusack. Owen and his real estate agent were also aware of issues with piping in the home, yet failed to disclose the information to Cole Dusack. Unfortunately, seven months after Cole Dusack purchased the home, the pipes burst causing $10,000 in damages.
There are two options when it comes to selling a house with two mortgages (NAR, 2013). First, the mortgages could be combined for Owen to sell the house. Another option for Owen would have been to pay off the second mortgage during the sale of the home, which would take away from his profit (NAR, 2013). In this case, it is his mortgage company’s fault for allowing him to go through with the sale of the house with two mortgages.
However, Owen is still responsible for the loan. He will have to repay it. However, Owen’s bank should have let Cole and his mortgage company known that there was a second mortgage on the house (NAR, 2013). Cole is not responsible for the repayment of the loan. Cole’s mortgage company should have required an inspection prior to allotting Cole a mortgage, although it is not required by law. If they don’t require an inspection, it is the individual’s responsibility to get one on his own …show more content…
Title insurance should have also been purchased so that the title company would be held responsible for the second loan (Bagley, 2015, p. 551). The title company or Cole himself could sue the real estate agent or Owen because they are both required to disclose all known problems (Bagley, 2015, p. 550). If Cole did have an inspection and the defected pipes were missed, the inspector would still not be held accountable. Inspections are only surface deep, they do not inspect behind walls or flooring (Evans,
There are two options when it comes to selling a house with two mortgages (NAR, 2013). First, the mortgages could be combined for Owen to sell the house. Another option for Owen would have been to pay off the second mortgage during the sale of the home, which would take away from his profit (NAR, 2013). In this case, it is his mortgage company’s fault for allowing him to go through with the sale of the house with two mortgages.
However, Owen is still responsible for the loan. He will have to repay it. However, Owen’s bank should have let Cole and his mortgage company known that there was a second mortgage on the house (NAR, 2013). Cole is not responsible for the repayment of the loan. Cole’s mortgage company should have required an inspection prior to allotting Cole a mortgage, although it is not required by law. If they don’t require an inspection, it is the individual’s responsibility to get one on his own …show more content…
Title insurance should have also been purchased so that the title company would be held responsible for the second loan (Bagley, 2015, p. 551). The title company or Cole himself could sue the real estate agent or Owen because they are both required to disclose all known problems (Bagley, 2015, p. 550). If Cole did have an inspection and the defected pipes were missed, the inspector would still not be held accountable. Inspections are only surface deep, they do not inspect behind walls or flooring (Evans,