If I win the bid in 2nd loan. If the bidding price is more than

Foreclosure Investing
1

If I win the bid in 2nd loan. If the bidding price is more than the total amount of first and second loan. Will the first mortgage being paid of automatically using my bidding money?

2

Hi Cluo,
Unfortunately no. The proceeds from your purchase will go first to the 2nd mortgage, then to any junior loans or liens (a 3rd for example), and then to the owner. They will not ever be used to repay any senior debt, typically including the 1st mortgage and property taxes.
Hope that helps,
Sean

3

Hi Sean,
Thank you very much to let me know this. How do I know which loan is the foreclosure from? If it is from HOA or property tax, will my bidding money never go to pay off the loans?

Sorry I am new in foreclosure. Thank you!

4

Hi Cluo,
That is one of the more complicated parts of trustee sale or sheriff sale investing - understanding which loan you are bidding on and which debts will remain after you buy the property. The forums have dozens, perhaps hundreds, of posts on just that topic and are an excellent place to start learning. Note that we provide an estimate in PropertyRadar of what position the foreclosing loan is, but even though it is usually correct, you should not rely on it, and instead learn the rules and verify the position yourself (or work with someone who can).
Best,
Sean
Best,
Sean

5

Hi Sean, Thank you very much!

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