What happens to 2nd position if 1st initiated foreclosure?

[KC Zhang]

I'm looking at several 2nd NPNs for purchase. Several of 1st position holder started the foreclosure process. The underlying assets have enough equity (FMV) to cover both 1st and 2nd. How can 2nd note holder ensure the property is sold at FMV at trust deed sale? I assume if is sold at FMV, 2nd lien holder will get they owned. Thanks for your help. Casey

[David Krulac]

If you buy the 2nd position, the ONLY way you can insure that the property sells for FMV at the foreclosure sale is to go to the sale yourself and bid.

Finding out the rules in your Trustee sale and when you need to pay the full amount and how much deposit is required.

From my experience properties seldom sell for FMV at the foreclosure sale, unless there is a homeowner bidding up the price.

You should be buying the 2nds for cents on the dollar, maybe 10% or less, since they are going to be wiped out anyway.

Around here only about 1/3 of the initial list goes to sale and of those maybe 10% are sold to third parties, so that's about 3% of the initial list. almost a needle in a haystack.

There is the risk that nobody other than the first bank foreclosing actually bids, in my experience that happens 97% of the time from the initial list.

*** dirty Harry says, "Do you feel lucky, well do you?"