Bought a second lien...

[Sophie Yin]

Hi all,

I am new in this area. I bought my first house this month without enough knowledge. It seems like I put myself in one of most complicated cases now... 

I bought this condo on auction in front of county court house this month. It was a second lien. The bid started at 25K, I bought it for 56k. There was another guy there bidding with me. The first mortgage is 96K after about 10 years of payment, the loan's status is current, it had been paid until Jul. The first lender is Ocwen.

The condo is worth about 150k-160k. The outside of the building looks good. Have not seen the inside. For now I know the paint needs to be done in the condo and AC needs to be replaced.

Now I have several questions,

1. I want to negotiate with Ocwen for a discount on the payoff. In that way, I would not buy it exceeding the market value. But I don't know how to do this. Is there anybody knows about Ocwen, their regulation and how to do this?

2. I talked to an attorney, I was told I was the owner of the condo after I got the Deed. I haven't got the Deed yet. Is there anything I need to do to secure myself as the owner? Somebody told me to let the owner sign a quit claim deed, what is that for?

[Chris Seveney]

You can try but again if a property is worth $150k and the bank has a first note for $90k, they will not negotiate it. They view it as they have $60k equity in the property. For a short sale, it's when it sells for less than is owed. Since you are paying off the 2nd mortgage and acquiring the property you basically own the property with a 90k note on it. If it is worth $150k the bank will not let it sell for less than 90k

In regards to another bidder "who looks like an investor" doesn't mean he is one. Your best bet now is to either sell property outright and minimize your losses or find someone to rent the property and use it as a buy and hold.