We initially did a home loan for a customer using Freddie Mac forms. The intention was to sell it to FM but we decided to keep it in house. The customer is now having some problems paying his loans so we want to combine some things to help him out. This would be done in-house on our state forms. However, we would like to continue to use the existing mortgage as collateral so that we don't lose our lien position. Is this possible given that the mortgage is on a FM form?

The mortgages on our loan system are used both for our in house loans and our freddie mac loans.

So you're saying it should be okay to use a mortgage on a Freddie Mac form for an in-house loan?

Yes

If you advance any new money against the FM mortgage more than likely it will not cover the new advance. Read the mortgage carefully. If it has no future advance clause then it cannot be used and I don't recall the FM mortgages having a future advance clause in them.

Good point Dan- thanks

The mortgage is for $52,000. Combining two notes would result in a new loan of approximately $51,800. So I think we would be okay.

Let me repeat what I said above. Review the mortgage very very carefully for a section that allows future advances. In the 10 to 12 years I've dealt with FM I don't ever recall seeing one of their mortgages with a future advance clause in it.