Re: The OP asked a good question

Just to clarify, I bought the 2nd and subsequently foreclosed on the former owner, so I didn't buy it at TS. I don’t know if it makes any difference when it comes to making payments on the first and/or bringing it current.

The former owner has repeatedly contacted the first (a credit union) before and after the TS. So presumably the lender is aware of the situation.
One easy route I was thinking, and probably that I would end up doing, is, using 3rd party servicer or not, to have the end buyer makes payment to me, and I will simply make payments to the first by walking in a local branch (I have the loan #). The amount will be the current amount plus $200 a month to cover any payment fluctuations. It does need monitoring, so the end buyer shall refi in a year or two.

My question: is there any legal basis for me (the former junior lien holder) to go straight up to the lender and make payments, change mailing address, and get other loan info, etc?

The worst case scenario is that the 1st is absolutely jerk about it. Then we just flip it as there is enough equity in it and we have enough time.

A side question, I have heard that when a junior lien holder forecloses and becomes the new owner of the property, the senior lien holder can’t call due-on-sale. The legal basis is presumably the Garn – St. Germain Act. Is it true?

Thanks,

Lin

P.S. Rick, we probably wouldn’t use contract for option to sell because we would recoup all the money we have put in so far (and some more) if the end buyer can put down 20%. Then it becomes a no-money-down deal for the rest of the time while we collect monthly income and collect equity and principle down at the end. Option money probably wouldn’t be enough.

P.P.S. Kristine, this is a “He”, literally (my last name), not a she. But I am used to the confusion.