Re: Buying a 2nd Mortgage foreclosure
Posted by Bill H on February 28, 2008 at 20:27:04:
In Reply to: Buying a 2nd Mortgage foreclosure
Posted by WashingtonStateInvestor on February 27, 2008 at 18:00:26:
The 2nd position lender is the one who filed for foreclosure. 125k is owed on the first mortgage and 140k on the 2nd (a line of credit actually) If I purchase the home for the minimum bid of 140k, do those proceeds to directly to the 1st mortgage? ....NO...
And then the 2nd gets wiped out?....NO...the 2nd is paid off by your 140K (Which will probably closer to 160K with the added arreages, attorney fees, closing cost, etc)
(Why would they file for foreclosure then unless they are planning on bidding at the auction themselves to raise the price above the minumum to get some of their $$$ back...) If it is bid on they will get all their $$$ back, that is the reason for the foreclosure.
Are my assertions correct?....NO... Regardless of whether it is the 1st or the 2nd who files for foreclosure, the funds paid at auction will be dispersed by the trustee to the first mortgage first and any other liens are wiped out?....ABSOLUTELY NOT THE CASE!...Funds from a foreclosure sale go DOWN the chain of title ...NOT UP...the chain.
Correct? (I have purchased a number of homes at auction but they have all been 1st mortgage initiated foreclosures...)...You have apparently been one of the luckiest man who every #$%%$#ed behind a pair of shoes.
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