First Lien and purchase money 2nd lien. Foreclosure on 1st.
Hello. Newbie here. I'm looking at the foreclosure list in San Antonio for next month to scout for deals. I found a property where the owner bought by signing two notes at closing: a $95K first lien mortgage and a $23K second lien purchase money agreement with the same lender. The first lien is going to foreclosure. If the sale was to go through, it would extinguish the second, correct? But since it's the same lender, they'll likely set their reserve bid high enough to account for the 2nd lien balance, correct? It appears it was a VA loan (serviced by Ocwen) and is currently held by Deutsche Bank. Could the 2nd note have been resold elsewhere and therefore the trustee may not have it in their reserve price? The deal would be good if the 2nd lien is extinguished, but not if the balance on both has to be paid. Thanks for any help explaining this situation as I get better at deal analysis.