Posted on: 08th Sep, 2009 01:55 pm
I am interested in a house that will have a foreclosure auction soon. That house has 2 mortgages, each about half the values of the house. The foreclosure auction is only for one mortgage. How would the foreclosure auction work in this case, from buyer's point of view. Will I have to negotiate with two banks if I want that property?
hi milaboston,
you should note that though the foreclosure auction is only for the first mortgage, the second lender will have the rights to recover the dues from the original borrower. when you buy the property, you should check out that the earlier owner of the property clears off the second mortgage dues.
thanks
you should note that though the foreclosure auction is only for the first mortgage, the second lender will have the rights to recover the dues from the original borrower. when you buy the property, you should check out that the earlier owner of the property clears off the second mortgage dues.
thanks
And if he doesn't? I think the owner is just walking away from it all.
Though the original owner walks away from the property, he would be responsible for the second mortgage dues. The second lender would sue him in order to recover his dues.
I understand that. But how does that affect me as a buyer?
Hi milaboston,
If the second lender recovers the dues from the original owner, then you won't be liable for anything. In my opinion, you should make an agreement with the original owner that he would pay off the second mortgage dues once the property is sold off.
Take care.
If the second lender recovers the dues from the original owner, then you won't be liable for anything. In my opinion, you should make an agreement with the original owner that he would pay off the second mortgage dues once the property is sold off.
Take care.