Junior Lien Issue On My Foreclosure Purchase...

57 Replies

If it is a large amount just offer them 40% on the dollar and be done with it and the way it stands now you want to be able to sell with a lien on it, and I don't think any court will force a lien holder to release their lien without being paid.


Joe Gore

@Dustin DuFault  

I know an attorney in Florida who deals with banks around the county to work things out on short sales and forclosures as her full time job; she negotiated a short sale I had waited 1.5 yrs to close on, in 2 days she made progress that the agent/attorney on the sellers side couldn't get done in 1.5 yrs. Apparently she knows the decision makers at the banks. Email me if you would like her contact info.

I don't think the bank will release the lien to make you happy without payment just make then a fair offer to release the lien.

Joe Gore

@Kimberly H.  Thank you, I will keep this in mind. Still mulling over my options.

@Joe Gore The thread Chronicles my research on a strategy to 're-foreclose' the original action, which would allow me to add in the junior mortgage. There is case law in Florida that allows me to do this as the purchaser at the original foreclosure auction. If I prevail in my strategy I'd be saving tens of thousands of dollars vs. paying on the lien, so that is the avenue I need to pursue. When I first found out about this junior lien I did not think I would be able to get rid of it without paying it off... but a reforeclosure action seems like it may save the day... 

@Dustin DuFault,

If you are in first position, you can foreclose on the junior lien, but you said it is a large amount so the lien holder of the junior lien might fight back, and then you will be going to arbitration. You might want to check your state laws and see once you foreclose that the property must go to auction.


Joe Gore

@Joe Gore According to the research I've done - the course of litigation is determined by the right of redemption being foreclosed. In this case since the right of redemption being foreclosed would be that of a junior lien holder, their exercisable right of redemption would be to pay me off as 1st lien holder and take 1st position for a period certain (unlikely to happen since this would cost more than their lien to begin with). In other words the property shouldn't need to be auctioned off in this case. 

There is a link on page 2 of this thread that does a decent job explaining the process. I should qualify all of the above by stating this has never been done in my district court, apparently, so YMMV (or should I say MMMV :-/ )

I need to decide if I want to try and contact the bank myself tomorrow, or contact the banks council that filed the original foreclosure actions... or pay up and have my attorney file for the reforeclosure as a pre-emptive measure. 

I'll post back when I decide, and what the results are!

Hello All!

I finally got resolution on my issue - and it's a happy ending! 

My title company was able to reach out to the bank, who agreed to provide a lien release. I do not think I could have hoped for a better resolution. 

So, in the end I was only out the $300 I spent in legal research before contacting the bank, and I did lose my sales contract on the house. So now I need to re-list it, which may be the biggest effect of this whole thing, really.

Anyway, I came across this quote this week, which seems to have unending applications in Real Estate, and seems appropriate for my situation...

"Experience is a hard teacher because she gives the test first, and the lesson afterwards." -Vern Law, Pitcher

Thanks to you all for chiming in with your ideas & support. It is much appreciated!!!


Regards,

Dustin DuFault


@Wayne Brooks   

@Chad Urbshott  

Kristine Marie Poe 

P.S. Does anyone know what happened to @Account Closed ??? I had asked her to chime in on this situation at the beginning - when we really didn't have any rapport between us - and she graciously did so. I know she was really active on BP. I wanted to be able to thank her for helping. :-/

Congrats Dustin, glad to hear things turned out in your favor. 

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