--- In LandCafe@yahoogroups.com
, Mark Monson <mmonson2@...> wrote:
> Assume a land market that is rising. You find a house you want to
> buy. It sold five years ago for 100K. The seller wants 200K
> The bank sends out an appraiser and he agrees that the house and land
> worth 200K. For the sake of simplicity we will say the structure
> maintained value. This mean the land has increased in price 100K in
> five years. The bank writes a no money down mortgage for 200K. The
> seller takes the check and has the option of spending the money on
> and services or using it to buy stocks, bonds, or other real estate.
It wouldn't actually be a mortgage if the borrower could spend the
money on anything he chose, would it? I'd think that a mortgage proper
would require the assessed property as collateral. Dumb as the banks
have been, they haven't been quite so dumb as to assess real estate and
then give loans based on that assessment which the borrower can spend
on baseball cards, have they?