Posted by Ben (NJ) on February 25, 2001 at 23:17:28:
It is usually pretty easy to distinguish a first mortgage from a second. The first is generally a much larger amount, and is recorded first in time. The second is recorded later in time and is usually for a fraction of the amount of the first. The article in the paper mentioned an amateur bidder who thought he was getting the bargain of a lifetime by getting a nice home for the $24,000 mortgage amount. However, everyone else in the room knew there was a one-hundred thousand dollar first mortgage ahead of him which he would be responsible for. The same thing happens with tax liens. I own a large portfolio of liens and when I get the title work I can see if someone took title by sheriff’s deed but never bothered to get current with the taxes. When I start foreclosing on THEM they begin to put two and two together and are not happy! As for title work, I recommend Title Services of NJ in East
Brunswick. I have the number at the office but call 411.
Posted by Stacey on February 25, 2001 at 19:31:18:
I’ve performed preliminary deed/mortgage and back tax search on several NJ properties (as well as assessed values) ----------- Bidding this upcoming Wednesday…
Help from the Guru’s:
If all properties are 1st position mortgages, but have secondary liens looks like 2nd mortgages from another lender) - Am I responsible for the other debts on these properties? Several have back taxes that I know will become my debt, however I’m uncertain of these other liens. Please Help @@@@ Stacey / NJ
Posted by Ben (NJ) on February 25, 2001 at 20:22:42:
I have attended a few Sheriff’s sales but never won a bid. I have done all the preliminary homework though. I’m a little confused by your post but I think you are asking about the priority of certain mortgages and other liens. Tax liens are extremely high priority, these could take the form of municipal tax liens, state tax liens, and federal tax liens.You need to check these out thoroughly. You also need to know whether the foreclosing mortgagee is a first mortgagee or a second mortgagee. This is key. I would not even consider bidding where the second mortgage is the one foreclosing. The chance of multiple senior liens is too high. Also, this is a wild card but you need to check for State Spill Compensation Liens, which is a BIG issue in NJ since we have so many environmental problems. Just because the property is residential ( I am assuming it is) does NOT mean the state cannot slap a Spill compensation lien on a residential property owned by someone who at one point in time owned ANOTHER property which was contaminated. The rule in foreclosure is that junior liens are cut off (extinguished) but senior liens survive. The key is just knowing which ones will survive. One other point, these sales get adjourned constantly. Call the Sheriff’s office the day before the scheduled sale and again on the morning before the sale. I guarantee almost all of them will be delayed for another week or so. This will give you a chance to do more homework though if you need to. I am considered very conservative and more paranoid than some of my friends who buy at sheriff’s sale. I order an upper court search (which will reveal everything discussed above) and sometimes on six-figure bids order the entire foreclosure file just to see if all the defendants were properly joined. This area is as “pig in a poke” as it gets and the sheriff won’t do your due diligence for you. Coincidentally, see today’s Star-Ledger business section, page one, for sheriff’s sale horror stories. Our own NJDave is mentioned in the article for when he bought a 3 story house at sheriff sale which was jammed floor to ceiling with 8000 tires! Good luck!
NJ Ben & The 8000 Tire Ordeal, GRRRRR!! - Posted by NJ Stacey
Posted by NJ Stacey on February 25, 2001 at 21:24:13:
Dear New Jersey Ben:
Thank you for the thorough “head’s up”. I’ve attended many in SJ, and also have yet to been awarded the big enchilada! Despite this, (the hours of research I’ve poured into many of these properties)- I have NOT reached a level of dismay yet…
The info you’ve supplied has helped nine-hundred-ninety-nine percent !! I WAS under the impression that all junior liens were NOT discharged, hence my disinterest in many of the properties being auctioned!
Question -
However, when pulling records at clerk’s office, do you base your determination that the foreclosing mortgage is 1st position from the date on deed ??? - Or, is this information revealed by sheriff’s office.
As far as adjourment, I’ve learned that trick the hard way. All local sheriff’s numbers are on SPEED-DIAL…
I was certain that one particular property was NOT going to sale (list at $38K), but upset price was $31K !!!) Investor picked up a $85K assessed property for $31,100)), AHHHHHH…
If you can recommend a investor friendly title co, please let me know…
I will look into the State Spill Compensation issue asap… Thanks again, and I look forward to your reply. NJ/STACEY