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Tax Liens & Mortgage Notes

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Tehseen Baweja
  • Plano, TX
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2nd Lien Non Performing Notes and Bankruptcy

Tehseen Baweja
  • Plano, TX
Posted Jul 27 2015, 09:18

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.

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