Posted by DD on July 29, 2003 at 14:01:45:
it depends, talk to the 1st lien holder
2nd Lien and Due on Sale - Posted by Sam
Posted by Sam on July 25, 2003 at 08:03:54:
I have a 2nd lien note that is being offered to me. I was told that if the first went into default, and I made up the payments and foreclosed, the 1st could call the payment due. I do not think this is true because it was tried somewhere else. Can somebody tell me what court case was involved in this situation?
Thanks.
Re: 2nd Lien and Due on Sale - Posted by TKP, Houston
Posted by TKP, Houston on August 11, 2003 at 16:13:51:
Sam, Generally speaking you should not buy a (weak) 2nd if you are not in position to pay off the 1st in the event of default. In Texas a homeowner in default does not have the right to reinstate his loan by making up the back payments. However, in most cases the mortgage company will take the money and reinstate the loan as they in general do not like to foreclose on anybody.
I do not believe you as a 2nd lien holder have the right to make up a deficiency on the 1st to protect your position, however, you may lend more money to the homeowner so that HE may make up the deficiency.
In most cases the 1st lien holder may foreclose without even informing other lien holders about their action. Again, do not take a 2nd unless you are ready to “lift out” the 1st in the event of default. Godd Luck! TKP, Houston
Re: 2nd Lien and Due on Sale - Posted by Sam
Posted by Sam on July 29, 2003 at 09:13:30:
Come on guys, help me out here. If I buy a 2nd and foreclose on the second, can the 1st claim the due on sale clause is activated. I know at least one of you guys are knowledgeable.
Re: 2nd Lien and Due on Sale - Posted by MicheleCO.
Posted by MicheleCO. on September 05, 2003 at 22:26:47:
Don’t know how I know this, I just do. I think I read it in some of Bronchick’s materials. I live in Colorado and he runs our local club here. But the answer is NO, they can’t call it due. At least here in Colorado.