Posted by Atlanta_bob on June 02, 2007 at 22:29:53:
Your post suggests that you plan to work a short sale on this property, right? If Yes, then the 1st mortgage holder may not discount their current mortgage balance (at/near $95,500) if the house has an ARV at/near $180K - - no need to since they can recover their funds fairly easily after foreclosure. The 2nd mortgage holder MAY discount their current mortgage balance (at/near $24K) or they may buy the 1st mortgage holder’s Note, then start their own foreclosure process, or they may bid on the house at the courthouse’s steps during auction. The liens are, perhaps, a more important issue. Are they IRS Tax liens? State Tax liens? Mechanics liens? Each must be dealt with in parallel while you deal with both mortgage holders. A short sale requires a closing to pay-off both mortgage holders and you cannot obtain clear title to this house with lots of liens filed against it, so transfer of the Warranty Deed cannot occur, IMHO.
The mortgage holder who filed foreclosure will require a BPO or an appraisal, then have the house listed For Sale with a local real estate agent at/near that value. I do not beleive YOU will decide the List Price for that house, altho you can influence the BPO or appraised value by providing (low) comparable sales plus repair costs on the subject house.
If you can remove those $40K liens and/or get them to accept a BIG discount (like: 10 cents on-the-dollar), then you may have an opportunity here, since (I believe) neither mortgage company will discount their current mortgage loans vey much at all (see above remarks). Once you climb that mountain, then get a title search to insure you’ve discovered and resolved most/all title issues.
Hope this helps.