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losin 2nd Mortgage Foreclosure
Typically when a property has foreclosed i initiated it is by a first lien holder. This is because they have the most e equitable position. If a subordinate lien holder is on title they often wait for a first lien holder to foreclosure as many times it won’t change the outcome of their position. If a 2nd lien holder is a private investor they may rush to start f foreclosure to try to speed up the process to protect their position as large first lien holders often move slow. If a 2nd lien holder is extremely delinquent they can still start f foreclosure. We see 2nd mortgage who have not been paid on in years start foreclosure once they feel they are in a better equitable position.
If a 2nd lien holder has no equity then they often do not start foreclosure as it would cost them money to likely recoup little to nothing at a foreclosure auction. If they have a strong equitable position to recoup funds then starting foreclosure is in their best interest. A property can have foreclosure initiated by a 1st and 2nd lien holder during the same period.
At a foreclosure auction:
2nd mortgage foreclosures are more delicate to bid on at auctions. At times 3rd party buyers may purchase the position unbeknownst that it was a subordinate lien. This means they purchase the property subject to the 1st lien. Many investors have purchased poor positions and in turn losing their money in the process. You need to be wary of buying a subordinate lien that doens’t have an equitaible posistion or subject to a 1st lien pending foreldcosure action,
If you need short sale help or have questions, please fill out the form below or call 1-800-692-9960 and a specialist will be in touch with you shortly.