"Foreclosure for Title"

[Sean Dezoysa]

hello, my local REIA meeting someone asked an experienced real estate investor how to buy a property with bad credit. He responded with several suggestions, one of them the following:

"You can buy the second/third liens for a discount, foreclose for title, and then you're allowed to pay on the first."

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This went over my head. I understand that if you hold a lien against the house, you can protect your interest by paying on the liens above you. What I don't understand is how you can "foreclose for title", I thought foreclosing always forces the house to public auction (and the first position lienholder takes title only if no one else places a bid).

Is it really possible to foreclose directly for title, completely skipping the public auction, with some kind of clever contract clause?

[Wayne Brooks]

A "foreclosure for title" is still a foreclosure with a public auction. High bidder gets title, subject to any superior liens. If you are the high bidder on a second, you're now the title holder, not a lien holder. I don't know that the first has to accept your payments even if it is current and hasn't been accelerated. You've got due on sale clauses, if nothing else.