bought second questions!

[Jon S.]

I just bought a second at a ts in CA (it was a 2nd mortgage, not a HOA lien) The property has equity.

The first is scheduled to sell in a week. So I need to pay it off asap to keep it from selling.

How do I go about doing this? Lender is chase. Do I just call them up with the property address and ask for the payoff amount and go into a branch and write them a check? Is there anything else I need to do? - do I need to let them know I am the winner of the ts on the second (if so who would I even talk to?)

Then when I record the trustees deed the title should be clear? Are there any downsides to paying the first off before recording the trustees deed? (I don't really have a choice here due to time). I.E. if the second is un-done somehow and I have already paid off the first.

OR -
Since after winning the second I am now the owner of the property (and it has equity), if I allow it to simply go to auction and the bid is higher than the first, will I get the overpayment (or will the original borrower?) To do this I would simply record the trustees deed?

In the future if I buy a second is there anything else I need to look out for? Simply getting a preliminary title report showing only a 1st and 2nd with no additional liens (along with a NTS for the first showing the published bid) and checking for back property taxes?

Thanks!

[Michael Galloway]

Jon S., you just bought a ticking time bomb. As you know time is not on your side. I hope the your trust deed came already as it could take up to 10 to 14 days to receive it. And i hope you recorded it. You need to ASAP. Time is of the essence.

Just because you bought a second at the trustee sale does not entitle you to a extended redemption/reinstatement period. You will need to protect your interest by doing the following:

Plan A- get a hold of the 1st lender asap. Try to reinstate the loan by paying the deficiency. See if this is acceptable. Depending on the lender they may and they do, have the right to require you to pay the complete loan off if you fall within 5 days of the trust sale.
(California civil code 2924 explains the timelines and procedure of foreclosures in CA.)

Reinstating the 1st will buy you time by stopping the foreclosure.

Plan B- if you cannot reinstate. you must get a payoff demand and pay them off immediately. This is more money but will solve your situation.

Plan C- If plans A,B fail, you will need to protect your interest by bidding at the auction. You will need to bid above the combined value of the 1st and the 2nd (that you purchased) to protect your principle.

Side Note- Any overage over the bid amount you would be entitled to. However, it will take a while to collect. ( 1 year is the longest one i have had)

Lastly, i am sure you might be concerned with the deceased aspect, however this aspect is a non issue if you present your information correctly to the 1st lender in regards to a payoff.

Hope this helps, good luck and get moving.