Posted by Ward-CA- on December 28, 2002 at 12:36:52:
In Reply to: 2nd lienholder wants to foreclose posted by Nick on December 26, 2002 at 16:45:43:
: I sold some property, and carried back a 2nd mortgage for $170,000.00. A bank has a 1st mortgage of $460,000.00. I have received no payments, and want to foreclose on my 2nd mortgage. Can I foreclose without taking out the 1st mortgage. I am very sure the property would go for enough money to cover the 1st, and my second mortgage. The property is worth at least 2 million dollars.The Bank also holds a 3rd mortgage of 1.5 million. My main concern is getting my $170k back, but I cant afford to buy out the 1st mortgage. Any response to this question would be appreciated. Thanks, Nick in South Dakota.
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Nick,
Yes, you can independently foreclose on your secured position without regard for any other lienholder’s position or default condition. You don’t have to reinstate any senior lien nor pay them off.
But you may elect to cure the delinquency of a lien that’s senior to your lien, if they’ve already begun their foreclosure process ahead of yours. That’s about the only maneuver a junior lienholder has available to them to protect their equity position from being wiped off title by a foreclosing senior lien.
Once you reinstated them the senior lienholder would have to wait at least a month later to start their foreclosure all over again (if you didn’t keep paying them). That way you’d go to auction sale with your lien about a month before they could. So remember, all you really have to do is just reinstate their delinquency once. Making subsequent monthly payments to them is unnecessary and expensive.
Hope this helps.
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