Foreclosure on seller finance second lien

Guest 0.10 Dollars($)

I bought a property for $135,000 and then sold it for $179,000 with 12% seller financing. The buyer is in bankruptcy chapter 13 now (4 years after the sale) but they have not listed the secondary lien (seller finance) in the BK. I don’t want the 1st lender to foreclose on the property. But how do I go about satisfying the 1st lien and then foreclose on the second thereby regaining the title. The current property value is round $210,000.

larry · Joined: 27 Jun 2007 Posts: 2951 411.26 Dollars($)

Hi kimberly,

Welcome to the forum.

You have sold the property at 12% seller financing right? But there seems to have two mortgages. So you have financed a part of the mortgage. So can you please tell me the amount of the first mortgage and the amount of the second mortgage? How much do the buyer still owe to you still now?

Please inform us so that I can give you right answers.

Best of luck,
Larry

gmakerley · Posted: Sat Apr 26, 2008 4:28 am Post subject:

you won't be able to foreclose due to the bankruptcy. are you getting payments at all?

what do you know about the bankruptcy filing? have you had any conversations with the bankruptcy trustee? have you had any conversations with the first mortgage lender? is your second lien valid? by that, i mean, has it been duly recorded?

you've got some work to do to find out some very important information.

sara · Posted: Tue Apr 29, 2008 4:52 am Post subject: RE: foreclosure and second lien

Hi Kimberly,

What you can do is, have a talk with the first lender was to whether they'll allow a short sale on the property so that the first lien is removed. Whether or not there is any deficiency judgment to be paid, is what the first lender should be concerned about.

In case the first lender doesn't allow for short sale, you can have the property transferred to you sop that you have possession on it and can pay off the first lender to get the property free and clear, provided there aren't IRS liens, state tax liens, city assessments or ad valorem taxes.

Take Care

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