Purchase-money mortgage

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Purchase-money mortgage

A mortgage given by a buyer in lieu of cash when the buyer is unable to borrow commercially for the purchase of property.

Purchase-Money Mortgage

A mortgage in which the home buyer borrows from the seller instead of, or in addition to, a bank or thrift. Purchase-money mortgages usually are made when the buyer cannot qualify for an ordinary home loan due to lack of credit or income. Alternately, a seller may offer a purchase-money mortgage in a mortgage-takeover agreement, that is, when the sale price of the home is equal to what remains on the seller's own mortgage.
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(That's on purchase-money mortgages, as opposed to refis.)
The Mortgage Bankers Association reported that applications for purchase-money mortgages rose 7% for the week ending Jan.
* Demand for purchase-money mortgages appears to be rising.
The only distinction you need to pay attention to at this point is the distinction between purchase-money mortgages and the other non-purchase forms of mortgage lending, such as refinance, reverse mortgages and loan modifications.
The purchase-money mortgage is extremely difficult for a mortgage lender to direct.
The results in this paper also suggest that subprime lending did not increase homeownership: The number of defaults in a limited sample (about 50 percent) of subprime purchase-money mortgages within two years of origination is almost equal to the estimated number of first-time homebuyers who took subprime mortgages.
As a result, attorneys or title agents who processed traditional purchase-money mortgages for years--if not decades--have suddenly begun to hang out the proverbial shingle, promoting themselves as REO, FHA or short-sale specialists.
Demand for purchase-money mortgages will be quieted by the level and mix of unemployment.
This included refi rookies who had never originated purchase-money mortgages or marketed their services to the real estate sales industry, as well as the commercial bankers entering the business through mergers and acquisitions.
While purchase-money mortgages are not among the loans plagued by the most egregious predatory practices, the mortgage industry must still pay attention to the practices by which, and the prices at which, housing finance is made available to low- and moderate-income communities and households.
Citicorp identified that, whereas the borrower ordinarily interacts directly with the lender in the case of a refinance, purchase-money mortgages, which are the long-term mainstay of the industry, more commonly result from Realtor referrals.

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