What Should I Do?
Hi everyone!
I have a pending mortgage note purchase from the lender for the single family residence in NJ. They claim to be a lien holder in the first position and willing to sell the mortgage / note at a good price (below the payoff amount and close to the original mortgage balance). Property has quite a bit of equity and is located in the desirable neighborhood.
I am usually very methodical and careful in doing my homework (especially when buying paper for a $120,000!). So, I just got back my detailed title search and there is another mortgage came up against the property that was recorder before the mortgage that I am trying to buy. This lien is very small ($12,000) from one of the local banks but it’s still a mortgage.
In my world this mortgage would have priority over any other with recording date after it and be considered a 1st lien. However, the lender I am negotiating with claims that THEY ARE on the 1st position.
What kind off proof can I ask them for to guarantee that they are in fact sitting in the 1st row? Have they got them self a problem when they lend the money on the 1st place? Should I just ask the title company to figure this one out?
Thanks,
PerlUser.
Why does the lender want to sell? Typically lenders do not sell individual notes unless the note is deliquent.
Can you purchase the property? You may be able to pay off the 1st and "pay off" yourself, then resell the property at market vaule.
Sorry,
I should make it more cleared:
Property is in foreclosure. That is the main reason for lender to sell. Property purchase is a no-no. The homeowner doesn’t even wants to discuss it.
I would be happy to buy a mortgage I am currently negotiating and finishing the foreclosure, but ONLY if it’s a 1st lien. How can I verify that for 100 % giving the current facts?
Property FMV is $270,000 - $280,000. Mortgage I am trying to discount is $120,000. The other mortgage that appeared during the search is for $18,000.
Any suggestions?
Thanks,
PerlUser.