If I buy a house at a foreclosure auctions and I have bought the second what happens to the first?

Question

I know I am responsible to pay that but what do I need to do? Do I call the bank and request a payoff or do I make the monthly payments on that loan? Can I do this if the first is in the buyers name?

Answer 1

You have to contact the first mortgage holder and see what they're willing to do. Some will allow you to assume the original mortgage, some will insist it be paid off.

Answer 2

Normally when a property is foreclosed on and a second is involved the second mortgage will bring the first mortgage current to prevent them from doing the foreclosure thus protecting their interest.

Therefore if the second does the foreclosure the asking price is the cost of the second plus any fees necessary to attempt to collect the mortgage and any other foreclosure fees as well as the first mortgage.

So in answer to your question you need not contact anyone after the foreclosure sale what ever you paid for the house should have included all the mortgages, any liens and fees in the bid price of the property.

I hope this has been of some use to you, good luck

"FIGHT ON"

Answer 3

*Pay cash.
* Apply for financing in the town where you are buying. Bankers there may give better terms because they appreciate the market.
* Caution: You'll pay for two of everything now -- new roofs, yard maintenance, appliance repairs. Budget to cover maintenance, property taxes and insurance.
* Don't kill yourself financially- Check out loan rates across the U.S.: http://moneycentral.msn.com/loan/loan.aspx
Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice, called a Notice of Default or Lis Pendens. The foreclosure process can end one of four ways:

1. The borrower/owner reinstates the loan by paying off the default amount to during a grace period determined by state law. This grace period is also known as pre-foreclosure.
2. The borrower/owner sells the property to a third party during the pre-foreclosure period. The sale allows the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
3. A third party buys the property at a public auction at the end of the pre-foreclosure period.
4. The lender takes ownership of the property, usually with the intent to re-sell it on the open market. The lender can take ownership either through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction. These are also known as bank-owned or REO properties (Real Estate Owned by the lender).

Buying foreclosures is mostly the turf of investors looking to purchase properties at below-market-value prices, fix them up and then sell for a profit a practice commonly referred to as "flipping." Buying foreclosure properties is more complicated and entails more risk than going the regular home-buying route. Pre - foreclosures tend to be more for the seasoned investors. For starters you have to deal directly with the owner of the house who may not even be aware that the house was made public in a foreclosure listing. These people don't ask for their properties to be listed on a web site. Rather, foreclosure web sites get their listings from county recorders' or clerks' offices, notices of default are public record and add them to their databases without the owners' knowledge. Auctioning the property, which usually happens on the local courthouse steps, is the next stage in foreclosures. And if buying pre-foreclosures is tough for the regular home buyer, buying at an auction can be downright impossible. For starters you have to pay cash as financing auctioned properties isn't allowed. You're also expected to buy the house sight unseen and on top of that you're not allowed to get title insurance: If the house has a $100,000 tax lien attached the new owner will have to pay it off. The auction is the most risky way to buy. If no one shows up on the courthouse steps or there are no bids high enough to cover the outstanding loan the bank will take ownership of the property and put it up for sale through a real-estate broker. This is the easiest way to buy foreclosed properties but you are also least likely to get a discount as the bank will typically put it up for sale at or close to market value but prices are still negotiable. When a bank only has one or two foreclosures they may try to get the best value but when they're starting to get more inventory to compound the banks want to get rid of these properties and you see them starting to negotiate and discount. Bank-owned properties or real estate owned properties are usually sold through real-estate brokers. REO Network's database http://www.reonetwork.com/ represents over 8,000 brokers, agents and vendors (such as appraisers and contractors).