@Don Enrique  @Zac Wolf   That is an Excellent point Don.I assume if this was CA and an improved home this thing got bid up possibly hundreds of thousands of dollars over the amount owed.. and those funds ( if there are no other lien holders) are eligble for this past owner to collect..

I know a lot of very wealthy SFH holders and we have done extremely well without MFH.

As far as the foreclosure goes...yes, the subordinate mortgage CAN foreclose but it will likely be purchased by the primary mortgage holder in order to protect their interest in the property.

The answer may depend on the state where you are looking to invest.In Texas, most liens and mortgages are wiped out by the tax sale so if you purchase the deed at or after the auction, the previous mortgagee or lien holder can only 'take it away from you' via redemption. 

I do think that the idea of taking a seller out of the underwriting picture unless qualified to do so is a good idea, because taking someone who 1. is not qualified who, 2. has a vested interest in the sale going through, and especially 3. where that note holder services the note and has again, a vested interest in the failure of the borrower to perform is nothing more than a fraud under the hat.

For example, neither the IRA holder nor any disqualified persons to that plan may live in or vacation in the property."

Third, owner still has to convince second lien holder to remove/transfer/work out second lien if it doesn't work with your purchase price.2) Buy property at auction or after first lien takes it back.

Well I don't know that the visa status affects owning property necessarily, however I don't think a bank would give a loan to someone that doesn't have permanent residence or work status. 

Geez guys, while there is great advice as to getting assistance, which Dee will need to do, the process was his question....Texas is unique but even so, I believe it's the installment contracts that get you in trouble there and that you can do a sub-2 ....I was told by a Texas attorney that all residential sales need to use the Texas Real Estate Sale Contract and by adding addendums you can design your deal to some extent.You will certainly need title work and make sure liens are cleared unless they are agreed to be assumed.If I were a betting man, I'd bet that constructive notice to the underlying mortgage holder would be necessary in Texas, if not, IMO, it's still the way to go and I'm sure it makes a closing agent happier.I would also bet you will need to use a Special Warranty Deed or Grant Deed to warrant good title excepting out the existing mortgage.You transaction will also require customary disclosures by the seller, showing the transaction on a HUD-1, filing 1099s as applicable, obtaining a title policy excepting out the underlying mortgage and escrow disbursements.

Additional insured is not the same as being a holder of the policy.