Enforcing a second mortgage: dual closing?
I'm a lender with the second mortgage on a residential property. If, in case of a default, I were to enforce the note, it is my understanding that before taking the property over, I will have to pay off the first mortgage.
Question is: Let's say I have a buyer to buy the property from me. Is it possible to do dual (simultaneous) closing, whereby I pay the first note and deed the property over to the buyer at the same time?
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#1 Foreclosures Contributor
- Real Estate Professional
- West Palm Beach, FL
First you would have to acquire title. You can only do this through either a foreclosure, or a DIL from the borrower/owner. Both have their advantages,mans draw backs.
You don't necessarily have to pay off the first, but you do become responsible for the payments to prevent foreclosure. That lender may still call the note due because of the change of ownership, though.
As far as selling it, that gets a bit complicated. You should probably ask a local RE attorney about the requirements in your property's area. At the very least, the local title company should be helpful, I would think.
I would expect you'd need to involve some type of transactional funding so you can do two transactions: foreclosure to you (auction sale), then sale to end buyer. Each will probably need to stand alone "at arm's length".
