Posted by dutch on May 13, 2006 at 17:15:19:
When the property is sold at SS and the 2nd is foreclosing, you pay the 2nd loan only, and buy the property Subject 2 the first. Now, in most cases, the 1st is going to call the note due shortly after the SS. Not always. you can attempt to assume the loan, or maybe just catch them up and make the payments. but if they call it, just refi them out (there IS a lot equity, right? if not what the h are you messing with it for?)
Dutch
OKHomesavers
Sheriff Sale with 2nd foreclosing - Posted by Kelly
Posted by Kelly on May 13, 2006 at 16:28:34:
I searched the board & have not found a “good” answer. When you buy a property at the sheriff’s sale when the 2nd is foreclosing, the 1st has to be dealt with. Who has actual experience with this? Was the 1st mort. included in the sale amount or were you able to take that loan over Sub2? If you were able to take it over sub2, & there was interest & penalties due to the 1st, were these needed to be paid up front or were they just “tacked” on to the loan?
Tx,
Kelly(WI)
Re: Sheriff Sale with 2nd foreclosing - Posted by John Corey
Posted by John Corey on May 15, 2006 at 03:41:16:
The sale is to address the position of the 2nd lien holder. No reference and no comments are made as to the state of the first, what could be done if there are back payments, etc.
The lender in 1st can take any action allowed to protect their loan if the loan is in default. If someone was to buy the 2nd out of their position at a SS it is likely this alone will cause the 1st to go into default. Many time the 1st is already in default as a borrower who can not pay the 2nd many not be paying on the 1st.
The GSGM act that set up DOS was silent on the rights of the 2nd lien holder taking over the 1st to defend their interest in the property. Some lenders in 1st will expect to be paid off. Many lenders will not exercise the DOS initially as they do not want to get into the same position if things were reversed. At all times be prepared to pay off the 1st just in case.
Get a lawyer to offer a local opinion as to what normally happens in your state.
John Corey