2nd Lien Question

[Christopher Montgomery]

Good morning All,

I am looking at a nonperforming 2nd lien and while doing due diligence. I find out that the property is in preforeclosure from the 1rst lien lender. If I were to purchase this not how would I go about recouping the UPB on the 2nd, or would the foreclosure wipe it out all together. The property is in Las Vegas if that matters..

Please advise and Thank you all for your time,

[Patrick Desjardins]

Originally posted by @Christopher Montgomery:

Good morning All,

I am looking at a nonperforming 2nd lien and while doing due diligence. I find out that the property is in preforeclosure from the 1rst lien lender. If I were to purchase this not how would I go about recouping the UPB on the 2nd, or would the foreclosure wipe it out all together. The property is in Las Vegas if that matters..

Please advise and Thank you all for your time,

 @Joshua Andrews and Tom Mole broke it down for you. As we were discussing in another thread, there is money to be made with this type of note (through short sale, helping homeowner do a modification on 1st etc) but there are much better opportunities for you elsewhere. 

These are only good when you buy a stack of them - understanding that some will completely fail, some will break even, and some will be big winners. The play is that over the 10 or 100 that you buy, the ones that make profit outweigh the ones that lose.

As a one off, you would want to protect your capital by investing in safer notes.