Buying junior liens and becoming the lender

[Ron King]

After I buy a junior lien on a residential property facing possible foreclosure from the senior lien holder. How can I control the property from there?

Can I do the deed in lieu with the seller?

or if I reinstate the senior how do I control the property? wont I be at the mercy of the senior loan?

[Dion DePaoli]

Originally posted by @Derek T.:

So I've been buying first liens at trustee sales in California, but have not touched the junior liens. If I buy a junior lien are you saying that I don't take title, and that I can't pay off the first lien? Is that a hard process? Does the debt go in my name? Or does it stick with the original borrower? Do I have to get permission from the borrower to pay off their debt, or can I just do it by calling the bank and handing them a check.

Also, it's been hard to find the exact amount of the 1st lien and the payoff (when junior lien is up for auction). I can see through title when the lien was taken and how much it was for, but how do you find out what the payoff amounts are? There could be huge penalties that have accumulated over time if the borrowers was defaulting on both the senior and junior liens. 

 
Derek

Yes, if you buy a junior mortgage or deed of trust you do NOT take title.  You also do no take title if your purchase a first lien either.  Mortgagee are not entitled to the property only what is owed under the note.  

Paying off the first lien from a junior mortgage is a right that is reserved by the security instrument.  The advance to pay off any senior position along with other advances to enforce or protect the lien are recoverable through the note and security instrument by being added into the sum of what is owed by the borrower.  The item that is advanced must pose a threat to the advancing lien.  

Is it hard to advance?  Well no.  Advancing for a first lien and for a second lien is fundamental the same process.  

Does the debt go in your name?  No.  You are purchasing the debt as a creditor not as a debtor. 

As an aside, based on your questions here, you are confusing purchasing the REO from auction with purchasing the actual security instrument and note. When you purchase at a trustee sale you are purchasing the real property not the note. So you have not purchased a loan before. Lot's to learn.

I believe you second paragraph was answered in another thread.