Help - Forclosure Question - Posted by Bray

Posted by JoeKaiser on March 22, 1999 at 18:11:13:


Your Mother in law should foreclose. If she accepts a deed in lieu of foreclosure, she accepts the second along with it.

Tell her she needs to have her attorney foreclose. She’ll either get the cabin back, someone else bids on it and she gets paid off, or the 2nd holder himself steps in and pays her off.

Whatever the case, accepting a deed is NOT the way to go, at least based on what you’ve said so far.


Help - Forclosure Question - Posted by Bray

Posted by Bray on March 22, 1999 at 11:35:42:

My mother-in-law has carried the loan on a cabin she and her ex owned. The cabin has sold 2 additional times, and she has continued to carry the 1st, the last time it sold the owner carried a second. The cabin is worth about $60,000, $26,000 is owed to mother-in law, and we don’t know what is owed to the 2nd.

The new owners claim to have given $8,000 as down payment to the seller, made 4 payments to mother-in-law and have not made the last 6 payments, the are staying in the bay area about 3 hours from the cabin. These people do not return calls and are impossible to get ahold of. They left 5 large dogs outside and 1 cat inside the cabin and neighbors have not seen these people for over a month. Animal control did pick up the dogs, but the cat remains inside (somehow alive). The back yard is completely trashed and will take a lot of work to remove the garbage.

Here’s my question. Mother-in-law has offered these people $2,000 cash to sign the cabin over to her, the 2nd lein holder lives out of s

Re: Help - Forclosure Question - Posted by Irwin

Posted by Irwin on March 22, 1999 at 21:47:36:

I agree with Joe, that it would be unwise to buy a deed back from these people. You can’t do a deed in lieu of foreclosure when there is a second mortgae or other junior liens, becaue you end up having to pay them off.
I agree that you can foreclose, but the chances are good that she’ll lose the house to a bidder who is willing to pay more than the small first mortgage balance. I don’t know who came up with the nonsense about the State of CA getting the proceeds. It won’t. The proceeds will pay off court costs and r/e taxes first, then the first mortgage, the second (assuming that the holder does something to protect his position, and the balance, if any, goes to the deed holder.
You mother should find out how much is owed on the 2nd, and instead of trying to buy the title, buy the second at deep discount. Now, with the second total balance added to her first, she will have a better chance to control the f/c sale and might end up back in title. This is tricky, so be sure to get sound legal advice before wading in.

Re: Help - Forclosure Question - Posted by BankRobber

Posted by BankRobber on March 22, 1999 at 21:30:44:

I agree that your mother should absolutley hire an attorney to begin foreclosure proceedings. She will be able to add resonable attorney costs to the loan amount. If the attorney thinks it makes sense for your mother to accept a Deed in Lieu, the deadbeats will be more flexible after the foreclosure has begun. But if it were me… I would have the Deadbeats Deed the property to a third party then live there for 4 years while having the third party make payments on the 2nd TD but not the 1st TD, then foreclose off the 2nd after the 1st TD balloned to 50K or so.