Bought a second lien, how to get short payoff with 1st?

[Sophie Yin]

I bought this condo on auction in front of county court house this month. It was a second lien. The bid started at 25K, I bought it for 56k. There was another guy there bidding with me. The first mortgage is 96K after about 10 years of payment, the loan's status is current, it had been paid until Jul. The first lender is Ocwen. The condo is worth about 150k-160k. The outside of the building looks good. Have not seen the inside. For now I know the paint needs to be done in the condo and AC needs to be replaced. Now I have several questions, 1. I want to negotiate with Ocwen for a discount on the payoff. In that way, I would not buy it exceeding the market value. But I don't know how to do this. Is there anybody knows about Ocwen, their regulation and how to do this? 2. Do I need to ask the original owner to sign a quit claim deed if I pay the loan under her name?

[John Thedford]

@Sophie Yin

Did you know it was a second? That is a lesson many first time investors learn by mistake. It always pays to have a title company do a prelim search for you prior to bidding. If for any reason the 1st defaults and goes into foreclosure, you CAN pay off the 1st. If not and it gets foreclosed, your money is gone. Years ago I walked away from a 2nd I held on a property for two reasons: 1. I didn't want to pay off the 1st and, 2) I had already made my entire investment back and didn't lose any cash out of pocket. That was the last time I ever put myself in 2nd position:)