I get calls from people all the time who have subscribed to foreclosure hunting internet services - they've found these amazing deals of houses for sale at wild discounts - always, they refer to Lis Pendens when talking about them.
Got a call last week from a former client - so excited he could barely speak. Wanted to buy the house he found on the internet for $42,000 - a house that's had been worth $420,000 or so and was still worth in the high $300s! ! Had to explain to him that is was the owner's 10% 2nd mortgage going into foreclosure, behind the $336,000 1st mortgage that was also belly up. Not only that, the house wasn't even officially "for sale".
Many fee foreclosure sites list houses as "for sale" based upon the Lis Pendens filing at the local courthouse or government body that handles the foreclosure actions. Generally, that's all they are: the reporting of the legal action that has taken place to initiate the foreclosure process.
And usually, when the number that's quoted seems to be very small, minority portion of the home's value, and the exact amount of the second (or third!) mortgage, it's just that: the foreclosure action being started by the junior lien. So, you could buy the junior lien, which would make the 2nd mortgage holder very happy...but you'd still be in line behind the first mortgage and subject to it.
Of course, if for some amazing reason the first mortgage has been paid to zero and all they are asking is the price of the 2nd? Sounds like a great deal. Otherwise, what you're looking at is a longshot short sale if the home's value is still significantly higher than $63,000.
A second mortgage is an additional mortgage loan that you take out based on the equity you own in your home. Rather than refinancing, you keep the frist mortgage and add another mortgage to it. The second mortgage lender has a lien on your home, just as the first mortgage lender, but the second is junior to the first; in case of forclosure, the second mortgage lender must wit until the primary lender is paid off in full before he or she an collect.
A disadvantage of second mortgages is that interest rates generally are higher than on first mortgages, because of the junior postion the second lender must assume. And intital costs are usually the same as for any refinancing. But second motgage can be a viable method of obtaning needed cash in some cirumstances. Most second mortgages are fixed-rate loans, but some lenders also offer veriable-rate arrangements.
Note: Remember that in a variable-rate arrangement, you, the borrwer, bear much of the inerest rate risk, which may be substanial.