Can I buy second lien directly from lender

I was tracking a house foreclosed on first lien, but the auction date was just pushed off and off and it doesn’t seem it will happen.? Now I looked at the second lien (which is not foreclosed) and it looks like there might be some equity left on that lien (after the foreclose).? I heard you can buy 2nd lien from lender for a big discount (10% of the balance?) so I might end up with some profit after the house foreclosure by taking some risk.

The 2nd lien is Bank Of America, so I called BofA’s mortgage department, but the customer service rep doesn’t understand what I was trying to do and she doesn’t think I can buy directly from them, she said all the loan transfer has to be initiated from homeowner.

But I heard that was done before, which department (or phone number) should I contact for Bank Of America?

Yes, you can buy a 2nd (or any position loan) loan directly from the lender, and often at a discount to the debt owed. If there is a loan ahead (i.e. you’re buying a 2nd), that’s in foreclosure (NOD/NTS) it’s more likely you can buy at a deep discount, as that junior lender is in a position to be “wiped out” in foreclosure. Buying junior debt pre-foreclosure is** risky*, as you will need to defend (i.e. show w checks and be prepared to buy) if the 1st goes to trustee sale, or **you **risk getting wiped out. Moreover, if you buy a 2nd, as a junior lien holder, you also risk having your position wiped via?__“lien stripping”* in a Chapter 13 BK?

May all be moot, as unless you have “lender connections” and/or are willing to buy in bulk, you may not get the time of day from an institutional lender. They have plenty of interest from large Wall Street firms (private equity, hedge funds, et al.) who know and can manage the risks. That said, if you’re savvy, have capital, and can bear the risks, there are opportunities in note purchases.?

By the way, the rep you spoke w at BoA’s mort department was likely miss-informed or did not understand your question. The property owner would not be involved in any decision the bank might make about selling their interest in the loan. You see “assignments” all the time on loans (tnsfr from one institution to another), and none that I know of have required owner authorization. You’re not buying the property, but rather the lender’s interest in the loan (an assignment).

Henry … Yes!!! If you buy the 2nd you had better be prepared to buy the 1st.?

Here is a good example of an institution that is likely in the note buying biz > Foreclosure Radar ID?509337866

I don’t know and I am just speculating… but the above has all of the earmarks of a note buyer … They stand to do well. The Lakefront Tahoe property is listed at $2 million+ and has a $750K 2nd they (WEST LOAN ACQUISITIONS HOLDING) purchased from Bank of the West (at decent discount??? Likely yes). Sans subordination agreement, there is a $738K Wells Fargo loan “ahead” (in 1st position) of WLAH’s loan. As the owner of the 2nd, WLAH (who has not been receiving mort payments) is now foreclosing and thereby defending their position (by foreclosing before Wells Fargo). It will almost certainly go out at “full debt” bid and if there are no bidders, it goes bank owned and WLAH will promptly pay off the 1st and sell the property for a profit.?

If for some reason Wells were to foreclose first (before WLAH) WLAH would need to show at the trustee sale and defend. I’ve seen similar situations were the 2nd simply bought out the 1st before the auction and thereby stepped into 1st position (and subsequently foreclosed). Either way the 2nd/junior needs to protect their position or risk getting wiped out.

Henry - its doable, but figuring out who to contact is always the challenge. I’ve used the Lane Guide to look for additional contacts, though its not a panacea. It will take work to find the right contact. It’s also possible the work will be for not. There will be loans that they are unable to sell due to servicing agreements or other issues. Still, nothing ventured, nothing gained.