Posted by JohnBoy on March 28, 2002 at 14:00:37:
Buying the notes from the lender would probably be the best way to go if you can get them to sell.
What if the sellers were to get this worked out on the property? Would they still need to file a BK or would resolving the matter with the property take care of everything?
Could the loan be reinstated if the arrears were paid up?
If the Judge doesn’t approve of the plan then the Judge will usually order the BK to be dismissed or covert to a 7. If you have a plan worked out with the sellers to resolve the issue with the property then the sellers should elect to have the BK dismisseed for now instead of converting. Then they can refile later if they will still need to file a BK. This would also help to delay the foreclosure since their BK would be dismissed the lender would then proceed with the foreclosure process. When the sale date is near they can then file the chapter 7 to delay the process a little longer to buy time if need be. Filing the 7 would stop the sale until the lender gets a lift of stay or just waits until the 7 is discharged in usually 90 days.
Buying the notes from the lender and then taking the property back in lieu of foreclosure should resolve any issues with the BK court pertaining to the equity in the property. You would be a secured creditor and are entitled to your security.
Is the first current? If the first is current then you might just try to buy the second at a discount, then as a secured creditor take deed in lieu and just continue to pay on the first. Being a secured creditor with a second would entitle you to take the property back and continue to pay on the first without the lender calling the first due as long as the payments are current.
The lender may or may not be willing to sell off the second only. But if the second is the only note in default right now then they may be willing to sell it knowing their first is still secured as a 1st lien and knowing they won’t have to discount it to recoup all their money on that one.
You’ll need to talk with the lender and see what they’re willing to do and then take it from there.