Sure explain why the junior lien holder would buy out the first? If it were a great deal wouldn't the 1st bid over to get the great deal ?
.Also is that the best time for a private party to come in to bid?
1) If it were a great deal wouldn't the 1st bid over to get the great deal ?
NO. The 1st would want want to get out, what they have got tied in the property. If the first is forecloseing and the property is sold for more than the 1st has in it, the remaining money would go to pay the 2nd, and if there were more left, it would end up payable to the homeowner.
2) Why wold the 2nd foreclose?
The 2nd would foreclosure for non payment like the first. They would have to have a fair amount at stake to do this, because when a 2nd forecloses, the must pay the 1st mortgage it's entire payoff at the sherrifs sale.
If the 1st is foreclosing, sometimes a 2nd mortgage company will go to the sale and buy the property back (paying off the 1st) and reselling the property to try to recoup as much of thier investment as they can. In most cases though, the 2nd doesn't purchase the property, their lein in most cases is just deleted at the sale. This is why they are more likley to consider a short sale . . . something is better than nothing!
There is also a lot of opportunities before the sale with pre-foreclosures. If you specialize in "Short Sales", you will probably eliminate the majority of your local competition.
Are you asking why does the 2nd mortgage sometimes try to buy the property at the foreclosure sale (if the 1st is foreclosing)?
Sure explain why the junior lien holder would buy out the first? If it were a great deal wouldn't the 1st bid over to get the great deal ?
.Also is that the best time for a private party to come in to bid?
LynLinz,
1) If it were a great deal wouldn't the 1st bid over to get the great deal ?
NO. The 1st would want want to get out, what they have got tied in the property. If the first is forecloseing and the property is sold for more than the 1st has in it, the remaining money would go to pay the 2nd, and if there were more left, it would end up payable to the homeowner.
2) Why wold the 2nd foreclose?
The 2nd would foreclosure for non payment like the first. They would have to have a fair amount at stake to do this, because when a 2nd forecloses, the must pay the 1st mortgage it's entire payoff at the sherrifs sale.
If the 1st is foreclosing, sometimes a 2nd mortgage company will go to the sale and buy the property back (paying off the 1st) and reselling the property to try to recoup as much of thier investment as they can. In most cases though, the 2nd doesn't purchase the property, their lein in most cases is just deleted at the sale. This is why they are more likley to consider a short sale . . . something is better than nothing!
Best of Success!
BAMZ
Thanks Bamz!
It gets slightly clearer every day
I'm reving up for the day I bid at a foreclosure sale
Hi LynLinz,
There is also a lot of opportunities before the sale with pre-foreclosures. If you specialize in "Short Sales", you will probably eliminate the majority of your local competition.
Best of Success!
BAMZ