Trying To Buy 1st Mortgage In Foreclosure....
I have a $1 million dollar property with four (4) mortgage on it....
The first is at $180,000
The Second is at $45,000
The Third is at $180,000
The fourth is at $75,000
Now the last ten (10) homes I have bought I have gotten a short sale on...
Well when I tried to get a short sale from the third and fourth (held at the same bank) They threatened to buy out the first mortgage to protect their equity stake.
Now I have the money on hand to buy the first, but I need someone to help me with how to structure the deal and what to look out for before I ask the first Lien Holder for an assignment of mortgage.
If I have the first mortgage posiiton that I can negotiate short sales on everyone else because I will not sell my position to them...right?????
Please Advise
to my knowledge if there is that much equity left in the deal who would discount there paper.
Hmmmmm. If you buy the first position, any of the other positions can still foreclose. You are in the safest position if the house gets foreclosed on by one of the junior lienholders. However, it doesnt mean that the house wont get sold at auction. If you dont keep the 2nd 3rd and 4th positions current, they can each foreclose on you. Provided the equity position in the prpoerty, if it goes to sale, it sounds like everyone would get paid being that you have a million dollar property with 50% equity in it. If you have the money your best best is to buy the first and refinance the other lienholder out of position then you would have nothing to worry about.
I guess I reread the question and didnt answer your question.
Because of the huge amount of equity in this property, this would be a tough deal as all the junior lienholders would know they would get paid if this property went to T/S. I never heard of a 3rd and 4th putting good money behind bad, but I guess that would depend on who they were. It would make sense for them to protect their investment by bringing the senior liens current. They dont have to say yes to a short sale even if you are in 1st position. They still have the legal right to buyout all of the subsequest positions if they foreclose on the property. If I were you I would bargain with them before you invest in the 1st position unless you are getting it for an extreme discount. IF you are getting a discount, I would buy it fast and then go ahead and let the jr;s foreclose on you. You would be getting the original principal balance back at the T/S sale even though you bought the note at a discount. A very fast way to make some cash. If you want to keep the property, buy the first out at a discount and refinance the property. Afterall, you have quite a bit of equity in it.