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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] foreclosing off liens to get seller more equity Posted by David on August 27, 2003 at 10:45 AM A homeowner called me with the following scenario: owes 265k on 1st TD which was renegotiated (post - Ch. 7) to a 9% 40 year note. Also owes 10K on 2nd TD, but he's not paying on it and is not personally liable (discharged in Ch. 7, but still attached to the house). He has 60K of liens (child support, judgements, etc.) Total debt $335k plus interest on 2nd TD and liens. He cannot afford payments and wants to sell. House is worth $360-375k. It's been on the market for 2 1/2 months at $409K because the owner wanted to net $50K after Realtor fees. Obviously, he's dreaming and now starting to realize this. I proposed $10k to have him deed over the house. Homeowner wants me to buy the first, foreclose off everything else and get him more equity. My questions are: If there is a higher bid at the foreclosure auction than the amount of the first and second mortgages(approx $275k), do other lienholders get paid before the owner, or are they extinguished by the foreclosure? Are there any other "holes" in this fellow's plan? How would you approach this one? Follow Ups: Not worth anything to you.. Ward-CA- 7:31 AM, 08/28/03 (0) Post a Followup: Name : E-Mail : Subject : Comments: : A homeowner called me with the following scenario: owes 265k on 1st TD which was renegotiated (post - Ch. 7) to a 9% 40 year note. Also owes 10K on 2nd TD, but he's not paying on it and is not personally liable (discharged in Ch. 7, but still attached to the house). He has 60K of liens (child support, judgements, etc.) Total debt $335k plus interest on 2nd TD and liens. He cannot afford payments and wants to sell. House is worth $360-375k. It's been on the market for 2 1/2 months at $409K because the owner wanted to net $50K after Realtor fees. Obviously, he's dreaming and now starting to realize this. I proposed $10k to have him deed over the house. Homeowner wants me to buy the first, foreclose off everything else and get him more equity. My questions are: : If there is a higher bid at the foreclosure auction than the amount of the first and second mortgages(approx $275k), do other lienholders get paid before the owner, or are they extinguished by the foreclosure? : Are there any other "holes" in this fellow's plan? : How would you approach this one? 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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