A seller can ask you to pre approve with their lender as a back up to make sure you are able to close. However you are not obligated to use their lender at all. Before releasing any information to their lender I would just say I can provide you with a copy of my credit report and income but you are NOT to re pull credit. Just get a PRE approval from their lender based on the credit you provide because you can lower your score if its pulled again. Its actually a good idea if you want your lender to stay on his toes:)... more
I am not sure I understand what happened, but I will give it a shot. You stopped making payments on the first and the second. The second started the foreclosure and incurred fees and costs and the second was the winning bidder. The second did not tell the first because they did not want to payoff first. They want to sell the property to mitigate their loss and will be required to pay off first and additional interest when property closes. The second should of paid off the first when the they foreclosed. There is no extra money at this point, however, if the proceeds received when the property closes, you or other lien holder would be entitled to those proceeds(this is something an attorney in your area would have to resolve). The first should of known about the second if they started foreclosure. The second would have a reported lien and the foreclosure would show up on the title too.
Hope this helps
First Weber Group
Certifed Distressed PRoperty Expert