Posted by Kevin (IL) on November 24, 2004 at 15:14:38:
I have come across a property with both 1st and 2nd mortgages in default (from the same lender). 1st mortgage balance (fees,etc) = $707K/ 2nd mortgage balance = $200K. In as-is condition the property is worth roughly $1.1 million. My group was originally going to buy the property directly from the owner but he has dropped out of contact. The case is still active and the property should have a judgment rendered soon and a Sale Date within the next month or so. Our lawyer has suggested looking into buying the second mortgage at a discount then "credit bidding" at the sale with the idea that at the very least we can collect the difference b/w the original amount of the 2nd mortgage and what we bought it for.
The advice I have been given thus far is to try to contact the "right person" in the lender's loss mitigation dept regarding my interest in purchasing the defaulted 2nd mortgage and see if they are willing to negotiate.
This is an entirely new area of investing for me (have just done pre-foreclosure, cash-buy rehabs), but one that I wish to pursue. As such, I would appreciate any/all suggestions from anyone who has experience in this particular area of investing.
Also, does anyone have any suggestions as to how to efficiently go about searching for 2nd mortgages in default or will I be best served simply reading through the court files once I find pre-foreclosure properties of interest?
- Re: buying 2nd mortgage in default ANTHONY DAVIS 18:56:02 9/10/2005 (0)
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