Foreclosure And Paying 2nd Mortgage Off
I was at the court house steps yesterday to check things out. Someone bought a house for $100,000 that had a 1st mortgage amount of $204,000. Great right. As I was talking to people there, they told me there was a 2nd mortgage for $700,000 and that the bidder would have to pay the 2nd or lose their money. I thought once the 1st was paid off all other leins were void. It really scares me if this is the case. By the way, I live in Florida. Thanks, Big John
At a forclosure, you are only buying that interest that is being forclosed.. If a 3rd is forclosing, the 2nd and 1st retain their priorities. They are still in effect after the 3rd has gone to sale. Whereas the 4th gets nothing. The buyer at a forclosure needs to be aware of what leins are senior to the position being forclosed.
So I guess that $204,000 was the 2nd and the $700,000 was the 1st. Nice trick. Thanks for your response.
Lassiter -
Which lenders do you work with? or work for, if any?
Why do you like them?
I own my own residential and commercial brokerage. I work with about 20 lenders total and less than 10 regularly.
Reasons vary why I like them but my ideal lender offers high LTV financing for investors with fast underwriting and flexible guidelines.
You do not have a firm grasp on commercial financing. Why would you think that any lender would pay for the third party reports for you, its not the lender who is requesting a loan. Appraisals are paid for by the borrower for commercial or residential, in addition on commercial deals it is usually necessary to get an environmental report, engineering, insurance review, Title, Legal,ect.
Any borrower who is not prepared to pay for these items or the Due Diligence it takes to put a commercial deal together is still in the residential realm of thinking.
If you want to play with the BIG DOGS come prepared to play.
Good Luck on your PPM,
Robert
[addsig]
I tell all my clients on the Foreclosure News web site-- YOU GOT TO DO THINGS IN STAGES AND STEPS.
You have to understand seed money, bridge financing, mezzanine financing and permanent financing.Also it is very important to distinguish between debt, equity, and value added.
I was frustrated with lenders back in my younger years until I learned everybody has a niche or specialization. Most lenders specialize and you got to know which lenders do what.