Bank is wanting to Assign

[Teresa Ludlow]

I am trying to negotiate a short sale with a bank but the property has several liens.  The bank has both the first and the second mortgage.  They have filed the foreclosure on the second mortgage and did establish the upset price.  There were no bids on the property but they did satisfy the court and municipal debts on it.  They are wanting to assign their position as the noteholder for both mortgages and let us step in to finalize the foreclosure instead of just doing a short sale.  I am not really sure what benefits or downfalls this would have for us or for the bank.   We have inspected the property and know that the value is there if we can work through this acquisition.  Any advice or similar experience that can be offered is appreciated.  

[Denise Evans]

Is it a large national bank or a local bank?  If they "filed foreclosure" on the 2nd mortgage and there were no bids, that sounds like there was a foreclosure auction. If that is the case, then they did not satisfy subservient liens, but wiped them out. That also means there is only the 1st mortgage to assign, not the 1st and 2nd. After a foreclosure, the 2nd would be gone.

This sounds like something a local bank would do.  Most likely, the borrower is a friend, member of same Rotary club or church, or something similar, with bank leadership, and they don't want to be the one to foreclose on the borrower. Or, the borrower has threatened litigation and the bank is trying to get rid of a possible mess. You should do a LOT more due diligence.