Whoa. What does the property owner say? Can you run the title again and find what is going on? Look at that satisfaction, be sure that it references the 2nd you know about. See who signed it. Try to talk to that person. This sort of thing is not supposed to happen.
I don’t see for sure how it could help you. But you definately need to know the realilty of the situation before you take on the property.
here’s a snapshot of a short sale we’re working on:
current value based on BPO: 80k
payoff for 1st: 90k
payoff for 2nd: 12k
I ran a title search and the only lien that came up was the 1st mortgage. The 2nd was indicated as being satisfied last year (satisfaction of mortgage was filed) BUT the 2nd is actually still there (I spoke with 2nd lender and they are owed the balance of about 12k)…
Is it possible that the 2nd was sold in the secondary market but the new lender wasn’t recorded? If so, is it to my advantage, and how so?
What should I be aware of and what should I do as next few steps?
Re: Foreclosure, 2nd mtg not in title search - Posted by jasonrei
Posted by jasonrei on August 14, 2003 at 20:36:56:
I used to buy houses at the mortgage foreclosure auctions, and I did my own title searches. Every now and then I came across something similar. I’d look at the foreclosing mortgage, and then see a Release somewhere down the road, with no subsequent reference to the lien being REISSUED or reinstated. I really don’t know why it happens and I never bothered to ask. I almost always crossed those off my list as I didn’t have time to mess with iffy deals.
In May of last year I bought a property at a foreclosure auction. Deal was something like this. Associates loaned $20+k on a house in 1995. They recorded a lien release in 1998. They were foreclosing on that SAME LIEN in 2002. Bidding started at somewhere around $20k. I was the winning bidder at $28,700. Paid cash. Got a cash-out refi shortly thereafter. Then I sold the house. Nothing ever came up. Three different title companies didn’t say anything about it and nothing strange ever came up on the title commitments. Go figure.