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I am re-fy'ing and the lender did not discover my existing 2nd morgage. Am I obligated to point it out to them?

Staten Island, NY |

I am not trying to avoid paying the existing 2nd morgage, but obviously without it's payoff, I will be able to borrow more money at this new re-fi. But, if I don't have to payoff the existing 2nd morgage will I get in trouble for having 3 morgages? I will easily be able to continue to pay all 3 of them.

Thanks for all the replies. The bank has done their searches and only mentioned what they think is my only morgage. They must think the 2nd morgage is a credit card (Chase) and are not asking me to pay it off. I did not hide the information from them, I think they just misinterpreted it. I am happy with the situation and the loan amount that they approved for me and do not really want to pay the 2nd morgage if I do not have to, so am I still obligated to let them know they are going to actually give me a 3rd morgage?

Attorney Answers 4


  1. Yes, you are obligated to point it out to them. I cannot tell from your question, but you will, no doubt, be promising to give this new lender either a valid first (or second) lien and they will object if/when they learn they are in the third lien position. This is an event of default that will give them grounds to foreclose the mortgage.

    My answer is for general purposes only and is not not intended to establish an attorney-client relationship, nor is it advice upon which you should act or rely. But, if you really want me to tell you something upon which you can actually rely: don't eat yellow snow.


  2. They will disdcover it when they do the title report prior to closing. In any event, you are obligated to disclose it on your application. To do otherwise would be to commit loan fraud.

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  3. Tell the truth. You will need to certify your income and expenses for the refi. The second mortgage expense should show up on your monthly expenses. Also, the lender will run a title search and the second mortgage will show up.

    If this answer is helpful, then please mark the helpful button. If this is the best answer, then please indicate it. Thanks. For further information you should see an attorney and discuss the matter completely. If you are in the New York City area, then you can reach me during normal business hours at 718 329 9500 or www.mynewyorkcitylawyer.com.


  4. Yes you are obligated to point it out to them on your mortgage application. You are just kicking the can down the road because the mortgage wil be discovered after a commitment is issued and the title report comes back.

    My firm is a second generation family firm successfully handling personal injury and medical malpractice cases for over 35 years. "Let Our Family Help Your Family" www.kileylawfirm.com 516 466-7900

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