2nd mortgage foreclosure.

Member since 2023 · 8 posts · 0 votes

I was the highest bidder for second mortgage auction. What should I do with the first mortgage lender ( senior lien) that is going to foreclose at the property next month. How can I stop the foreclosure sale? I don't have large money to pay off the that lien.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Quote from @Rami Latif:

how about filing a motion for a temporary restraining order (TRO) and preliminary injunction to enjoin (stop) a foreclosure sale?

your grasping at straws. contact senior lender or trustee if you can, tell them your a junior in possession and ask them to post pone the sale for 90 to 120 days so you can do a refinance on it.. As a junior in possession they may work with you. 86k is not enough to do a BK over that would really hurt you going forward. worse that comes out of it is you know their position. its possible though that the property will bid higher than the 600k . if it goes to sale make sure you attend and watch the action very closely make sure bidders that qualify checks are not talking to each other and making side deals so the property only goes for minimum bid and you get nothing.. this is called colluding to stymie open bidding and in some markets it quite common. IF you see that happen or suspect it then you can raise holy hell with the authorities.

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Ron S.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
2y
Quote from @Simone Litsch:

Quote from @Rami Latif:

The property worth about 800,000
The first lien is 600,000 this total payoff
The second lien was 86,000 (this one I was the highest bidder)
The deed just got recorded yesterday and I just found out that the first lien going for trustee sale this month Nov 27.
Im not investor I was just following California law SB 1079 as prospective owner occupant that I can bid after foreclosure which I did.
I hope the first lender can will agree to refinance the loan and I will carry the loan and pay monthly.
this is very interesting, i was not aware that a property can even have 2 mortgages and 2 forecloures, did they mention this at the auction? i am following the aution websites and they dont mention any of this, they just put a starting bid, did you find this all out after the fact?

They would never mention anything like that at auction. its not their job. Its the job of the bidder to research and determine liens and encumbrances. You do that by ordering a title report and paying for it. People don't want to pay so, they buy a property blind because they see a $80K lien on a $800K property and think they are going to get a deal...and we all know how that ends up.
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Ron S.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
2y
Quote from @Rami Latif:

Thank you all for your help. I have learned a lot from your comments. I got reinstatement from the first lender trustee company and I already paid a total $25000 to cure the default of the first lien. Now the foreclosure is cancelled.
My next step is to negotiate with the lender to see how to deal with almost $600000 of line. I'm hoping to carry out the same loan with the same low interest rate. It's really hard for me to refinance with high interest rate. I will end up paying more than $4000/month.

They aren't going to negotiate with you in any way whatsoever, and you aren't going to be able to assume the existing loan. That just doesn't happen. Or at least, I've not seen it happen in 30 years in this business. The "how to deal with the almost $600,000" solution is to pay it off.

you may not like a $4,000 per month payment but hey, the good news is you didn't lose the property right? and better news is, i'll bet you don't make that mistake again.
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
2y
@Ron S. The sale was scheduled for 11/27 so this may be ripe for an update.
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Ron S.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
2y
Quote from @Tom Gimer:

@Ron S. The sale was scheduled for 11/27 so this may be ripe for an update.

Absolutely agreed!
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Sandra Cristobal
Member since 2024 · 1 post · 0 votes
2y
Were you able to evict the previous owners?
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