Buying A Home From 2nd Lien Holder That Has Foreclosed
Does anyone have experience with purchasing properties where the 2nd lien holder has foreclosed, but the the first loan is still current and being paid by the homeowner?
I am thinking of investing in this property as it is being offered at 75 to 100K below FMV. My plan would be to flip the property retail.
1. What are the possible pitfalls?
2. Can homeowner file BK and protect their interest or was equitable interest given up when 2nd foreclosed?
3. How long to get occupants evicted after sale?
Thanks for any input and feedback
THIS being a 2 nd i would not do it as you are in the bad place
Things get hard you are not getting payed the person you are buying this note from is the winner here !
As they have kept the 1 st current
As well if the 1 st is current you can not throw them out they are current on the main loan
You are in the back seat so to speak and have nothing but a paper saying you owe me some money
Now really try and get payed on it !
This is why so many note buying compines have stoped or never did buy 2 nd s in any way
Are you ready to buy the 1 st ?
iam sure no one is going to sell you at a discount a paying note
If you have bought the 2 nd sorry if you have not do not
[ Edited by northwest01 on Date 06/01/2009 ]
[ Edited by northwest01 on Date 06/01/2009 ][ Edited by northwest01 on Date 06/01/2009 ]
Since the second has alread foreclosed, then second lien holder now owns the property subject to the first position mortgage.
This is really no different than buying a property from an owner who pays off his mortgage from the proceeds of the sale. If you buy the property, you will have to bring your own financing and or cash to the settlement table to pay off the mortgage.
If there is enough equity in the property to give you a good payday for your primary and backup exit strategies, then why not go for it?
Has the 2nd foreclosed? Is the foreclosure complete?
Or is the property in foreclosure?
[addsig]
Does Bargain76 ever pay attention? I just joined and reading some of this totally useless information. If I stay in here Im going to end up teaching everyone else something. Ive been through every one of these scenarios.
Well Bargain this ought to be entertaining if not educational!
Jim
To answer a couple of the questions, as stated in the original post, the property has been foreclosed on by the second lien holder. They are the ones selling the property , via a wholesaler. My understanding is, that they are now the rightful owners of the property, subject to the first mortgage, which is still in place and current.
Does this preclude me from evicting the previous owner, if I were to buy the property from the the second lien holder that has foreclosed? If no, how long does it typically take to get the person out. House is in MD.
Sorry for the slow reply, I was out fixing houses today
Quote: Or does an approximate alliteration of your name, excrete, really mean full of sh*t?Bargain,
Where are you coming from? I interpret his screen name as a contraction of "executive relocation":
Quote:
On 2009-06-01 23:06, jetdriver wrote:
Does this preclude me from evicting the previous owner, if I were to buy the property from the the second lien holder that has foreclosed? If no, how long does it typically take to get the person out. House is in MD.jetdriver,
If the previous owner is still in the house, then the previous owner is a tenant. The person selling you the property is his landlord.
If there is a written lease, you have to honor the terms and conditions of the lease if you buy the property. You can not simply evict just because you bought the property.
If there is no written lease, then the tenant is a month-to-month tenant. You can give the tenant at least 30 days notice of lease termination at the end of the next month (when the month-to-month lease expires). If the tenant fails to honor your notice to vacate, then you can start eviction proceedings.[ Edited by NewKidInTown3 on Date 06/02/2009 ]
OK, NewKid... You have your opinions and I have mine.
Depends on your perspective...and depends on mine!
[addsig]
I have ran into this a couple time w/ hard money/private money seconds.
It can be a good opportunity.
Thanks for the replies. I believe I understand the situation now and would feel comfortable going forward with the deal with a just a little more DD.
With whom would I be negotiating that with, the first or second lien holder? What do you recommend for a strategy on this.
There is no 2nd lien holder. At foreclosure, the lien was extinguished and the beneficiary of the 2nd became the owner. They are who you negotiate as they own the property.
Once you have an agreement in principal, approach the 1st to negotiate that balance.
ITB,
The situation here is that the second lien holder either did not petition the court for a writ of possession, or did not enforce one if he got it.
Since he allowed the former owner to remain in the property after obtaining title by foreclosure, the former property owner became a tenant at will.
Unless there is a written lease in place, the tenant is on a month to month tenancy.
As I see it, landlord tenant law now prevails. If jetdriver purchases this property with the current tenant in place, his ability to evict and when he can evict will be governed by landlord tenant law.
I am pretty sure this would be resolved under landlord tenant law if jetdriver were faced with this exact situation in NC[ Edited by NewKidInTown3 on Date 06/06/2009 ]