# two loans same borrower

**URL:** <https://community.propertyradar.com/t/two-loans-same-borrower/2418>\
**Category:** Foreclosure Investing\
**Created:** [February 7, 2013, 9:21am UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418 "2013-02-07T09:21:19Z")\
**Posts on this page:** 12\
**Page:** 1

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 9:21am UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/1 "2013-02-07T09:21:19Z")

</div>

Hi,

I’m new here, so please forgive my ignorance 🙂

I’m looking at a property that is scheduled for trustee sale. ?The property has a mkt value of around $700k, and the announced opening bid is around 200k. ?This seems very attractive, but looking at the data, I see that the same owner has taken out 2 loans in 2003 and 2005, both from the same lender (for a total of 475k). ?FR shows that the loan balance is exactly 475k, the same amount as the loans taken years ago. ??How can that be? shouldn’t the loan balance be much lower as they paid their mortgage down over the last 8-10 years? Thanks

---

<div class="post-metadata">

**Author:** ![idannyb](https://avatars.discourse-cdn.com/v4/letter/i/96bed5/32.png) [@idannyb](https://community.propertyradar.com/u/idannyb)\
**Post date:** [February 7, 2013, 6:27pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/2 "2013-02-07T18:27:30Z")

</div>

Hi Alex, ?FR will show the original face value of the loans (when they were first taken) under Open Loans and also in Transaction History. FR will also show the “published bid” on any loan that’s scheduled for auction (trustee sale) under Notice of Trustee Sale Details. The “published bid” is the amount that is owed by the borrower on the delinquent loan at the time the NTS was recorded. If a borrower has been delinquent on payments (i.e. non-payment) for many months, the published bid can grow quickly (back due payments & late penalties) and will often exceed the original face value of the loan. The lender/beneficiary has the right to post an opening bid for up to the full amount owed … or they can “discount” (drop the bid) if they want to stimulate interest from 3rd party investors. I would recommend you look at the FR online tutorials as they cover this info thoroughly.?

Also, make sure the loan going to sale is in first position (by recording date) as you would be responsible for any recorded lien/loan that is senior (recorded _before_) the loan you might buy at a trustee sale. It is okay to buy a 2nd, but it had better make “financial sense” (i.e. there’s still equity left _after_ **you** pay off the 1st).

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 6:31pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/3 "2013-02-07T18:31:51Z")

</div>

Thanks Danny, great info. ?I know that I should always make sure the NTS is for the senior loan, but there’s only one NTS, so how would I know if it’s for the first or second loan? many thanks.

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 6:35pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/4 "2013-02-07T18:35:53Z")

</div>

Nevermind my question above. This is for the 1st loan, and the published bid is around 200k. Sounds too good to be true. Doesn’t it?

---

<div class="post-metadata">

**Author:** ![idannyb](https://avatars.discourse-cdn.com/v4/letter/i/96bed5/32.png) [@idannyb](https://community.propertyradar.com/u/idannyb)\
**Post date:** [February 7, 2013, 7:09pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/5 "2013-02-07T19:09:31Z")

</div>

Alex … check for subordination agreement … two loans by same lender and the ostensible 1st is smaller than the subsequent 2nd loan. Is that what you’re seeing? Yes? Under such a scenario, it is possible/probable the lender recorded a subordination agreement (SA) thereby placing the later/larger loan in 1st position.

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 7:27pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/6 "2013-02-07T19:27:04Z")

</div>

Hi Danny, thanks for the advice. ?Please bear with me, how would I tell if there’s an SA? here’s the radar id for the porperty:?507328476

Would you be kind enough to have a look? Thanks.

---

<div class="post-metadata">

**Author:** ![idannyb](https://avatars.discourse-cdn.com/v4/letter/i/96bed5/32.png) [@idannyb](https://community.propertyradar.com/u/idannyb)\
**Post date:** [February 7, 2013, 8:14pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/7 "2013-02-07T20:14:38Z")

</div>

Interesting! There are indeed two loans by same lender (WAMU now Chase) and 2nd\*\* is\*\* larger than 1st. Under such a scenario, a subordination agreement is probable. It will not show in FR, but would be a recorded do. **If**?(\< IF) a subordination agreement exists, and the two affected loans are by same institution (WAMU in this case) then subordination verbiage would often be included in the 2nd Deed of Trust. It would clearly state (in legalese 😉 that this new loan will be in a senior position verses the earlier loan, which is now “subordinated.” You may also see a separate subordination agreement recorded. You can find this online (just the index info) via the country recorder’s office (gantor/grantee - name) lookup. Even better, you can go down to the recorder’s office so that you can read the **full \*\*document(s). I quickly checked the Orange County Rec office and did not see a separate subordination agreement under the owner’s name … BUT that was my quick (superficial) online look/see … and as I stated, you would want to read through and look for “subordination verbiage” in the 2nd DOT (same lender as1st). Finally … this may all be for nada … as when a \*\*large** 2nd is set to be “wiped out” (in this case if NO subordination agreement exists) at trustee sale, then it is possible that the 2nd lender would send a rep to the auction to bid/protect/defend their position. The 1st going to sale can only open at “full debt,” but a rep, hired by Chase (formerly WAMU), may be there with checks in hand to ensure bidding reaches a “sufficient” level.

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 8:23pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/8 "2013-02-07T20:23:58Z")

</div>

Wow, that’s a thorough answer. Thanks so much for the info. Do you want to partner up on this property? 🙂 I will definitely check the county records to get to the bottom of this.

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 8:38pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/9 "2013-02-07T20:38:00Z")

</div>

Quick question Danny, if I buy the 2nd DOT on FR (the document), is that the same that is in the rec office?

---

<div class="post-metadata">

**Author:** ![Alex](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Alex](https://community.propertyradar.com/u/Alex)\
**Post date:** [February 7, 2013, 10:06pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/10 "2013-02-07T22:06:10Z")

</div>

Danny, I have the document if you want to take a look at it. ?Send me your email so I can send it your way. ?Thanks.

---

<div class="post-metadata">

**Author:** ![idannyb](https://avatars.discourse-cdn.com/v4/letter/i/96bed5/32.png) [@idannyb](https://community.propertyradar.com/u/idannyb)\
**Post date:** [February 7, 2013, 11:53pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/11 "2013-02-07T23:53:14Z")

</div>

Hi Alex … thanks … but I’m up in Nor Cal and you’re on your own on this one. Hope all goes well. My bet is that sans subordination, Chase will send a rep to defend.?

---

<div class="post-metadata">

**Author:** ![idannyb](https://avatars.discourse-cdn.com/v4/letter/i/96bed5/32.png) [@idannyb](https://community.propertyradar.com/u/idannyb)\
**Post date:** [February 9, 2013, 5:51pm UTC](https://community.propertyradar.com/t/two-loans-same-borrower/2418/12 "2013-02-09T17:51:58Z")

</div>

Here is a good illustration of a HELOC that is foreclosing (appx $50K), with another large loan ($590K face, albeit a World Savings “neg am” to $737,500 max) that\_?looks\_ to be junior, but is in fact in senior (1st) position. Have a look at Radar ID?503267628 … coming to the steps soon.

The $50K HELOC was made by World Savings (later assigned to NDEX West LLC who is now foreclosing) and was recorded **9/11/2003** as 2003-00112399?

The larger open loan ($590K face) was also World Savings and was recorded **8/23/2005** as 2005-0064093

Foreclosure Radar’s data/algos **correctly** identify the larger $590K loan as being in 1st position … yet the document recording dates tell a different story … that being the small $50K HELOC was recorded \_first \_(theoretically in 1st position). HOWEVER, since the HELOC remained open ( **not** reconveyed) World Savings made sure that they recorded a “subordination agreement” (rec 8/23/2005 as 2005-006094). This subordination agreement moves the larger loan into senior (1st) position.?

?