All Forum Posts by: Sean S.

When you purchase a property through a second mortgage foreclosure and then pay off the first mortgage, does any conveyance occur? Since you already own the property, is this equivalent to a lien being satisfied? Can the property somehow convey back to borrower on the first mortgage? 

Thank you, @Wayne Brooks. What if say a lien is recorded right before the foreclosure sale so that the trustee is not able to name/serve it to the new lien holder? The lien is still junior but does that provide a loophole for junior lien holders to keep their liens alive? Or does the trustee have no obligation to name/serve beyond some point in time before the sale? 

It's often stated that junior liens are extinguished or wiped out when a home is foreclosed upon. But what is the actual process for this? Does the trustee handle this? Or is it the County? Or who? 

If I purchased a home from a foreclosure sale done by the second mortgage lender and I now want to payoff the first mortgage, what financing options are available to me? The first mortgage is obviously still in the name of the former owner and the lender will not allow me to assume the loan. 

Thank you @John Slater. I have a copy of the second mtg trust deed but not the note itself to see the terms of the default clause, which I imagine are crazy as you say. That said, even if  the rate doubled to 20 percent immediately and applied for 4 years, it still wouldn't get you from 300 to 779. So the penalties would have to be very crazy. 

And thank you, @Jay Hinrichs. A buyout makes sense to me but it would also mean the minimum bid is less than the amounts owed on both the first and second mtgs combined—I'm told that's pretty common. 

Thanks @John Slater and @Wayne Brooks. If you then do see that the minimum bid is set to double the amount of the second mtg, what could be the reason? The second mtg in my real world case is a hard money loan and even at a 10% interest rate, it would not double in the 4 years since it became due. 

I've been told that perhaps the second mtg bought out the first, but wouldn't that be recorded? 

Say a second mortgage lender forecloses on a home. They're owed $100K and the lender on the first is also owed $100K. The 2 lenders work together and set the minimum bid at the auction to $200K. The lender on the second hasn't bought out the first so if nobody bids, they take ownership of the home subject to the first. If a third party purchases the home at auction for the minimum bid at $200K, both liens are paid and the title is clean. 

Is this something that happens? 

@Chris Seveney I have it at no less than $1.2M. The home was previously listed on the MLS and I was able to tour it.

Thanks @Brett Goldsmith and @Chris Seveney.

Chris, do you think it would be possible for the second to be working with first without anything recorded at the County? I really hope this is the case but I can't find anything to back it up except for the fact that the reserve bid is well in excess of second's outstanding balance. 

Hi @Seth M., I realize this post is 2 years old but I just came across it. Can you tell me what the process was for perfecting title? I was under the impression that since the property is still subject to the first mortgage, it could not be perfected until that was paid off.