Posted by Natalie-VA on February 04, 2007 at 10:44:47:
If you hold the 2nd and the 1st is foreclosing, that’s when you would show up to bid and protect your position. There may be other remedies prior to auction.
If you hold the 2nd and are doing the foreclosing, the bidders would be bidding subject to the 1st. You would open the bidding with the amount due to you (or just the amount you’re willing to accept). If no one bids, you get the house (subject to the 1st).
–Natalie
Can Second Mortgage Foreclose??? - Posted by Tommy FL
Posted by Tommy FL on February 03, 2007 at 18:15:59:
Can a second mortgage foreclose over the first if the homeowner is not current? i heard that the first mortgage would not allow the 2nd to foreclosure over the first?
How could the 2nd foreclosure if the homeowner doesn?t pay? That would put them in 1st position if the 2 forecloses right? Can someone elaborate?
Thanks Tommy FL
Re: Can Second Mortgage Foreclose??? - Posted by Bill H
Posted by Bill H on February 03, 2007 at 22:12:16:
YES, the second can freclose. However it is not OVER the first. All deeds of trust are in the chain of title according to their position.
LIke Dealmaker said. If the 2nd forecloses then they or the succesful bidder at the sale will get the property subject to the existing 1st TD and any liens junior to the 2nd will be wiped from title.
If there is and IRS lien that is junior they will have an automatic 120 days to decide whether or not to execute their right of redemption.
All lienholders have ther right to step in and protect their interest. So if the first is current and the 2nd is not then the 2nd can foreclose. Likewise if the 2nd is current and the 1st is not the 2nd can still step in and protect their position by foreclosing. NOTHING says the junior lienholders have to sit idly by and get wiped out.
Good Luck,
Bill H
Re: Can Second Mortgage Foreclose??? - Posted by dealmaker
Posted by dealmaker on February 03, 2007 at 19:47:10:
Sure you can foreclose on a second, you won’t get the property, just whatever equity there is over the first. Be very careful though, if they’re not paying you then they’re likely not paying the first either.
When this happened to me I just “reinstated” (started paying on) the first, foreclosed (Trustee’s Sale here), didn’t want anyone else bidding just up to the first and closing me out! Then I paid off the first a couple of months later when I re-sold it.
dealmaker
Re: Can Second Mortgage Foreclose??? - Posted by tommy fl
Posted by tommy fl on February 04, 2007 at 08:58:06:
So if you write a second mortgage and the homeowner defaults on your second you can foreclosure but if i’m understanding correctly you will have to go to the court house on sale day and bid up until your exspenses are paid? is that correct?
Or if the homeowner is late on the first you can reinstate the first and then foreclousre for missed payments on the first mortgage?
thanks Tommy FL
Re: Can Second Mortgage Foreclose??? - Posted by Bill H
Posted by Bill H on February 04, 2007 at 11:39:08:
No, you are entitled to put all of your expenses of the foreclosure in your opening bid, atty fees, late charges, document preparation, etc. You do not have to show up…that is the opening bid.
If you wish to try and get the property you have to show up and bid.
Yes, you can reinstate the first and must do so to protect your position.
Every Deed of Trust that I know of says that any default is considered a default of that DOT. Otherwise you as a junior lienholder would be wiped out every time with no recourse.
Good Luck,
BillH