2nd Lien Non Performing Notes and Bankruptcy
As I educate myself on Notes, I would love to know what are some of the strategies and due diligence requirements when looking at 2nd Lien NPN and chapter 7.
Here is an example:
Sale Price: $8k
UPB: $100K
Property Value: $290k
Sr Balance: $400k
Sr Status: Unknown
Chapter 7 Bankruptcy / Discharged
So the property is definitely under-water and there is no information on whether payments are being made to the senior loan. My questions would be:
1. If the Sr is not reporting any payments, is there any other to confirm if payments are being made to Sr or a loan mod is being worked on?
2. Assuming payments are not being made, is it pretty much a worthless deal because most probably Sr will foreclose and wipe out 2nd lien?
3. What are some other strategies and due diligence one should do for a deal like this?
Would welcome any thoughts as I am just starting to learn this area.