Dealing with 1st lien when buying second lien foreclosure

[Kate Pierse]

I was wondering if anyone has any hands on experience working with a bank to pay off the first lien on a property after they have bought a property at a foreclosure on a junior lien. There is a property worth about $300K that has a senior lien of $150,000 and the second mortgage is foreclosing for $45,000. In NC the only other liens I need to worry about at this point are IRS and property taxes. I will get a full title search done and talk to my attorney, but before I spend the money I'm wondering about the process of actually contacting the bank regarding the pay off of the first loan. Did you find the bank cooperative? Were you able to work it out? I'm not worried about having to pay the lien, just the mechanics of it. Any input from your experience is much appreciated!

[Account Closed]

Originally posted by @Steve Babiak:

@Chris Martinis definitely the one who knows NC. 

A couple of members I know of who have had juniors and had to deal with senior liens are @Dave Van Horn and 

@Account Closed; maybe they can tell a bit about what they had happen. 

 @Dion DePaoli  Your input would be appreciated.

My experiences with payoffs to senior lenders have not been easy.  Although CA Civil Code clearly provides for a successor in interest to make payoffs to senior lenders, the lenders in my cases did not cooperate.  A couple of times I got authorizations to release info from the borrowers, which made all the difference. Not always easy or possible to do when buying at foreclosure sale. One time my escrow officer successfully used an after hours automated payoff request line.  This was after she had made the normal demand for payoff request, accompanied by the deed showing I was was the new owner.  The lender said they had to have an authorization from the borrower, which was not possible.

So while the law says the new owner must be given statements and payoff amounts, that doesn't mean they are automatically doing it.  They have liability concerns on their end.