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Updated over 4 years ago on . Most recent reply
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Buying 2nd position mortgage - at Auction
Hi Guys,
I have been buying and attending auctions for a while,
there is a property i am doing my dd on that has a 2nd mortgage foreclosing on it, with 1st still current.
I haven't attempted to buy a 2nd lien position before, trying to wrap my ahead around the strategy-
here is the deal i am looking at:
1st position lien:
2004 balance of $36,000, to date - 1st hasn't issued any default notices so i am guessing it is current.
2nd position lien:
2007 balance of $35,000, Foreclosing lien @ Final judgement of $62,000.
there are no other superior liens such IRS etc..
ARV is about $150,000, so good equity if ill be able to buy below judgement.
I am assuming that buying the 2nd position loan will give me title the property subject to the 1st loan..
will i be able to directly negotiate a payoff with 1st lender ?
what are the potential setbacks on buying 2nd position.
Thanks for insights.
Most Popular Reply
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You will probably NOT be able to negotiate with the 1st. They may even have a higher balance like the 2nd. they may say that they want ALL their money now or start foreclosure on you after you buy the note.
OR they may be negotiable. Why dont you try to get ahold of the 1st and talk with them.
OR talk with the owner if you can track them down. I like to be in a safe position. Having all the information makes me feel more comfortable.