Posted by TKP, Houston on August 11, 2003 at 24:24:30:
Phong, What make you think the owner will be able to pay both you and the 1. lien holder in the future if he is 15K behind at this time. Your best course of action depends on what your goal is. If your goal is to get a good return on your money and you are not capable of taking out the 1. lien holder when owner defaults again down the road you should not lend him the money. If you goal is to take over the house you may lend him the money to get “in position”, but it might become a “messy trip”. You might be better off purchasing it at the foreclosure sale, which certainly will not be far away with 15K in arrears. Of course, with a 15K 2.nd with all kinds of fees and charges added because of owner’s future default you can probably out-bid any competition at the foreclosure sale, without actually paying anything extra. There are some Pros that invest in defaulted mortgages just to make the extra late fees and legal fees at the auction. If they do their own legal work the return can be very high. Good luck. TKP, Houston