trustee pulling a fast one?


#1

I am following a house I want to buy at a trustee auction. The preliminary title report says Washington Mutual has a deed of trust, secured by the property, owing $500,000. The same bank has a second loan for $250,000, which says “THE ABOVE DEED OF TRUST ?SECURES AN EQUITY LINE OR OTHER REVOLVING LINE OF CREDIT”.?

The trustee posted a minimum bid amount of $750,000. Isn’t the line of credit loan supposed to be wiped out by the auction? Trustee won’t discuss it.


#2

Sounds fine to me. ?Lender on second can bid in what is owed on second. ?You are right, technically the 2nd should give the Trustee enough to cover their loan - but since the lst holder, 2nd holder and trustee are all the same - it would be like taking money out of one pocket and just shifting it from pocket to pocket. ?Who is damaged?