If a junior lien holder forecloses and owns, how can they get 1st lien payment info?

As a junior lienholder, you have very little leverage unless buying out the 1st will net you more than as a foreclosure. Beating the senior to foreclosure is usually not a good plan. Even if the senior beats you to the punch, you still have the same options open to you as you would by filing yourself without the costs.

Originally posted by Dan Inc

Does anyone know of anyway for a foreclosing lien holder to get that information so that the payments can be continued?

If you have a junior lien that is secured by the property, your note should have a provision that allows you, the noteholder, to contact the senior lender (servicer) without an authorization. You will need to provide this information to the senior lender usually by fax. If this note does not have this provision, you still might be able to get the information by providing the security document to the senior lender. Since you have security interest, most states afford you the opportunity or right to protect your interests and you can contact the 1st lender yourself.

Edited: 06/26/2010 at 10:15AM by Scott Hubbard

Dan Inc

Real Estate Investor · Raleigh, North Carolina

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Icon_minipost Oct 27 '09, 11:15 AM

Hypothetical scenario; owner deeds property to you and doesn't give you any payment details or sign authorization/poa, and you have no way to reach them. how can you keep the payments current?

Edited: 06/26/2010 at 10:16AM

Scott Hubbard

Rehabber · Tucson, Arizona

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Icon_minipost Oct 27 '09, 02:30 PM

Well, there is really not much you can do because the security document is the promissory note and your name is not on it.

If you have the owners personal information SSN, property address, loan #, then you could pretend your the owner and get payoff information via the telephone.

Outside of having a contact at the lender, or at least having the sellers personal information you stand little or no chance.

Edited: 06/26/2010 at 10:16AM

Dory Peters

Real Estate Investor · dc, Washington D.C.

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Icon_minipost Oct 27 '09, 02:50 PM

I wouldn't do that deal without involving a title company. Also, hypothetically speaking, one could obtain that mortgage information via the title company.

Keep in mind that a title agent has to get this mortgage info in order to prepare the HUD-1 (and the good faith estimate for that matter).

Edited: 06/26/2010 at 10:16AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Oct 27 '09, 02:55 PM

Actually in Dan's scenerio since the deeded the property to him, even though it would be a clouded deed, he is the property owner and has full rights to all information about the property.

This is best accomplished by doing a title search which will give you the name of the leinholder. You may then contact them and explain the situation.

There are not many lienholders that want to forclose on a property when there is an option presented to them on how to prevent the foreclosure.

Edited: 06/26/2010 at 10:16AM

Scott Hubbard

Rehabber · Tucson, Arizona

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Icon_minipost Oct 28 '09, 12:43 PM

In theory the title company could provide him with information, in pracice that information will be limited since he is not the borrower.

There are several privacy laws that protect borrowers and all financial service companies, including title companies, cannot disclose loan numbers, SSN's, and arrears.

If he is going to backdoor this thing, he is going to find it very difficult. If there is some decent equity, get an attorney involved.

Edited: 06/26/2010 at 10:17AM by Scott Hubbard

Dan Inc

Real Estate Investor · Raleigh, North Carolina

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Icon_minipost Oct 28 '09, 01:00 PM

There is decent equity, but I figured I'd have a hard time getting the info. We don't use title companies here for closings, but rather attorney's, and I assume that they'd have just as hard of a time getting the info as I would.

I can do a title search easily and see who the lender is, that's not a problem, but I picture a lot of unproductive phone calls that will test my patience.

If I can't get it, it's not the end of the world, I have some back up plans, but it would make nice to add another possible exit strategy to the deal.

Edited: 06/26/2010 at 10:17AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Oct 28 '09, 01:42 PM

In Dan's scenario, all he wanted to do was keep the payments current. Any creditor can allow you AS OWNER to do this without disclosing any security information.

They take all your information and note the account so that your iformation is listed as a note (or red flag, so to speak) which informs the account poster to post the payment but do not issue any reciepts of any kind. The once a month statement will reflect the payment and will be sent to the owner of the account at his address.

This keeps all information only sent to the proper party(ies) and the account is kept up to date by the posting of the monies being sent in.

Edited: 06/26/2010 at 10:17AM

Dan Inc

Real Estate Investor · Raleigh, North Carolina

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Icon_minipost Oct 29 '09, 04:08 AM

Wow great info! That is quite possibly what I need!

Edited: 06/26/2010 at 10:17AM