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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Not easy to calculate the unpaid balance on a junior lien. Posted by Ward-CA- on May 29, 2003 at 9:44 PM In Reply to: Present / Future Value of Junior Note posted by Rick on May 29, 2003 at 3:01 PM : Hi Ward, : Thanks for this great resource. I have been combing all I can find on JBB's... I have two questions: : First, one thing that doesn't make sense to me is, all the discussion about buying JB's refers to the face value of the note-- that is, for example: if I am negotiating the purchase of a $50k junior (which, in this case is current but senior is in default), and the trustor has been paying on it for say, 5 years; the balance now is say, $20k. Obviously, I would need to calc the present and future values when making my offer, correct?... anything else to consider here? : Second, if I buy the note and it is not in default, how can I start a foreclosure unless I am forced to reinstate the senior? : Just seems a little cloudy, any clarification would be greatly appreciated... thanks. : Rick =•=•=•=•=•=•=•=•=•=•=•= Rick, #1. I don’t really think you’d have paid off $30K in 5 years on a $50K second trust deed, but let’s go with your example anyway. Calculating the balance owed on a 2nd trust deed is quite dicey since junior liens in the U.S. don’t adhere to predictable interest rates nor to standard amortization periods either. #2. You don’t have to be forced to reinstate the 1st. You can elect to do so and thus start your foreclosure-backed demand for immediate reimbursement from the property owner. I’d have to say that it is highly unlikely that someone would continue paying on a junior lien when he/she knows they’re going to lose the property anyway because they aren’t paying on ALL the liens. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Hi Ward, : : Thanks for this great resource. I have been combing all I can find on JBB's... I have two questions: : : First, one thing that doesn't make sense to me is, all the discussion about buying JB's refers to the face value of the note-- that is, for example: if I am negotiating the purchase of a $50k junior (which, in this case is current but senior is in default), and the trustor has been paying on it for say, 5 years; the balance now is say, $20k. Obviously, I would need to calc the present and future values when making my offer, correct?... anything else to consider here? : : Second, if I buy the note and it is not in default, how can I start a foreclosure unless I am forced to reinstate the senior? : : Just seems a little cloudy, any clarification would be greatly appreciated... thanks. : : Rick : =•=•=•=•=•=•=•=•=•=•=•= : Rick, : #1. I don’t really think you’d have paid off $30K in 5 years on a $50K second trust deed, but let’s go with your example anyway. : Calculating the balance owed on a 2nd trust deed is quite dicey since junior liens in the U.S. don’t adhere to predictable interest rates nor to standard amortization periods either. : : #2. You don’t have to be forced to reinstate the 1st. You can elect to do so and thus start your foreclosure-backed demand for immediate reimbursement from the property owner. : I’d have to say that it is highly unlikely that someone would continue paying on a junior lien when he/she knows they’re going to lose the property anyway because they aren’t paying on ALL the liens. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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