1st loan has NOD & NTS. 2nd loan has NOD only. any problem in buying the 1st.


#1

I am interned in a property which has a 1st loan with NOD and NTS recorded.
The 2nd loan on the property also has a NOD Recorded.
Do you foresee a problem in acquiring the first at an auction?


#2

The 2nd being in foreclosure has no affect on the 1st’s ability to foreclose, and shouldn’t adversely impact your purchase of the 1st at auction.


#3

You should be able to buy it, but it is my understanding that you will then be responsible for the second and any other lien on the title.


#4

That is incorrect. If you buy a 1st at trustee sale, subsequent loans are typically wiped out, and the buyer would have no responsibility for them.


#5

Sean, what I gather from your comments is that as long as I know I am purchasing the TD which is in the first position, it does not matter where the other subordinate loans and lines are in the foreclosure process. The subordinates TDs could be at any point along the foreclosure process and they would still get wiped out.
Is that correct?


#6

Yes. A second mortgages foreclosure process does not impact the rights of a first mortgage to foreclose.


#7

If I bid and win a second loan in trustee sale, and then let the first loan foreclosed, would my credit be adversely impacted?


#8

Although the first mortgage remains outstanding against the property, you do not “assume” the loan, therefore it should not be able to adversely affect your credit.