Order Of Deeds Of Trust
I have an option to purchase on a home with three Deeds of Trust. The first is an obvious home mortgage from World, but the second and third are both home equity lines from Washington Mutual and Key Bank, respectively. World and Key are foreclosing, but Wash. Mut. is not. The Wash. Mut. DOT was recorded about 6 months before the Key DOT. Does this mean that the***Must have at least 5 friends to unlock***s subordinate to the World and Wash. Mut. DOT? Or is it possible that the Key and Wash. Mut. DOTs are equally positioned. There is no language in either DOT document to suggest that they are subordinate to anything but the World DOT.
Here in WA state, there is no redemption period for foreclosures. If the***Must have at least 5 friends to unlock***s not subordinate to the Wash. Mut. DOT then I can really push Wash. Mut. for a short sale because they will drop off the property and only get what is left over after the other DOTs foreclose. If not, I need to be working with Key.
Thanks for your help. Let me know if you need more info.
I'd check with your local register of deeds to make sure, but in most cases, whichever deed is recorded first gets the spot. 1st, 2nd, and 3rd liens (no equal places).
It could be that the last lien did not know about the second and failed to do a title search, don't know.
Hope it helps
Roger
Yes, that does help. I will place a call to the recorder's office as soon as it opens this morning.
I have another quandry about this deal. The total due on the Key Bank DOT as noted on the Notice of Trustees Sale (NTS) is about $65k. However, the most recent statement says the current balance is about $36k. The maximum credit line on***Must have at least 5 friends to unlock***s $65k. Is there a reason why the statement does not reflect what the NTS says?
If the payoff on this is really in the mid 30s then I don't need to worry about short selling, but I'm guessing it is more complicated than that.
Thanks again for your help.
--Aaron
On an equity line of credit DOT, the full potential mortgage is listed. A line of credit is a revolving account, so it would be impossible to list a current lien amount.
Side note: This is why investors take out an equity line of credit on holding properties. It appears to anyone searching that the property is maxed out on liens. No equity makes you a bad candidate for scams, sueing, etc.
Roger
That makes sense. Does this mean that the payoff amount will be a function of the total balance on the line, or will they require the total up to the value of lien? This could make this deal go without any need for short sale if the payoff amount is based on the balance. In fact, I believe I already have a cash buyer if this is the case. Perhaps I should be patient and wait until the trustee sends me the payoff information.
Thanks.
--Aaron