Hi, I did something dumb. I loaned money to a friend. I took third position on her home. She has a first and second mortgage. That makes me #3. She's current on both her 1st and 2nd mortgage. She's behind in paying me back. I need the money. We're not really friends much any more. She told me she understands. She says she won't fight it if I foreclose on her. My question is, what happens to her other mortgages? Do I have to pay those off?
2007-07-11 11:51:44 · 4 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
When you foreclose assuming you have a note and mortgage and not just a note, you will be asking the court to sell the property to pay off the debts. At the sale of the property the first mortgage gets their money from the sale proceeds then the second gets paid and if there is any money left you get paid. Otherwise never loan money to friends.
2007-07-11 13:12:07 · answer #1 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
No, unfortunately, YOU most likely won't get paid off.
If you foreclose, the liens in first and second position get paid off before you do. There most likely won't be enough equity in the home to cover it.
Have you considered selling the loan to another investor? That will get you your money, and put them in 3rd position and take you off. This is the route I would go if I wanted to get paid.
2007-07-11 21:35:42 · answer #2 · answered by Expert8675309 7 · 0⤊ 0⤋
It probably will do you no good, as the 1st and 2nd mortgage get paid first. Odds are she has negative equity and if forced into foreclosure there will not be enough for you. Sorry but that's the reality.
Good luck
2007-07-11 20:46:05 · answer #3 · answered by frankie b 5 · 0⤊ 0⤋
Yes.
2007-07-11 18:55:57 · answer #4 · answered by teran_realtor 7 · 0⤊ 0⤋