That’s all news to me. The only thing I’ve ever heard is that if YOU are a junior lien holder AND if YOU are foreclosing AND you are not outbid at the sheriff sale AND you have to take it back as REO, THEN you are not obligated to pay the seniors in full, that is you pay the arrearages and start making payments (subject to) until you sell it.
If it stopped being for sale, like if you moved in or rented it out, then you’d have to pay the seniors in full.
I learned from Bill B. and others that one of the original “subject to” uses
was to allow a junior lien holder (second mortgage or DOT holder) to protect
their interest if the homeowner defaulted on their first mortgage by taking
over the property "subject to"the original mortgage… We are now
experiencing some defaulting loans where we are in a second lien
position…and
would like to use this ability to get the first mortgage company to stop a
foreclosure action and allow us to step into an ownership
position,(with the homeowner’s cooperation)…in some cases to actually take
it Subject to and in other cases simply to delay the foreclosure long enough
to work a short sale…we’re running into a brickwall with the lack of
cooperation
from the lender’s attorneys who are running the foreclosure…and, we lack
being
able to cite the specific legal right that gives us the ability to protect our
interest…how do we get their attention? How are others handling this? Is
there a federal right for junior lien holders or is this state by state?