Joint Tenancy
I'm new to purchasing foreclosures and am learning the ropes. I'm currently focused on several properties due up on the auction block 1/5 and have a few legal type questions to make sure I don't get in a jam. Any info would be appreciated.
First, if a property lands up on the steps, what happens to the 2nd mortgage. Am I in any way responsible for paying that off? Same company?
Second, I found a property that has a Joint Tenancy Warranty Deed between Builder and current Homeowner. Builder loaned 38K to Tenant and filed security deed. The homeowner then Quit Claimed property back to builder and took out a 184K mortgage. The tenant has defaulted on mortgage and the house came on the block for 195K. Does the builder have rights to the property if the property forecloses?
Learning quickly,
Mark
To your first question, if the property bid price is above what the first loan payoff is, then the excess will be paid to the second mortgage (rare situation). Usually, the second is wiped out by the foreclosed first. However, since one lender has both security deeds, that lender may bid up the property to cover both loans.
To your second question, that one seems a bit odd. Im not sure that the homeowner conveyed his entire interest to builder then took out a 184k mortgage. Are you sure that is how everything is recorded? Because if that is the case, since the builder is the owner of the property thru the QCD and the tenant mortgaged the property afterwards here is nothing for the lender to foreclose on, because the tenant did not own the property at the time of signing the mortgage documents. So under this situation the builder owns the property free and clear.
Hope it helps, but check the recording information carefully under that second scenario.
I checked the sequence of documents:
4/5/04 filed 5/18 - Security deed for 184K Home Star loan to HO
4/5/04 filed 5/18 - JTWD between HO and Builder
5/15/04 filed 5/21 - Security Deed builder/HO 38K
4/05/04 FILED 5/28 - Quit Claim HO--> Builder
What do you think?
checked the sequence of documents:
4/5/04 filed 5/18 - Security deed for 184K Home Star loan to HO
4/5/04 filed 5/18 - JTWD between HO and Builder
5/15/04 filed 5/21 - Security Deed builder/HO 38K
4/05/04 FILED 5/28 - Quit Claim HO--> Builder
Ok first off, Im assuming the security deed for 184 is filed before the jtwd, as far as in the deed book. If its not, its a vesting problem that will be cleared up with the lender's title insurance, so its not really a big deal.
So either way, the fact that you are bidding on the 1st mortgage that is pre jtwd & qcd will wipe out any interest the builder has.
However, Id bet that the builder will be on the steps with you bidding the property up and over the lenders amount to try and recoup his losses on his 38k. Maybe not, just a guess.
Hope it helps
razzio
Thanks for the help!