Golden West, purchased by Wachovia, owned both the first and second mortgages. As customarily, when a lender owned both first and second liens, the second lien in default will foreclose first to protect its position. This is the case. The second, then sold the property, as REO for $470K, minus selling and holding costs of @$35,000 and first trust deed of @410K in principal, Wachovia took back @33 cents to the dollar.
Your play would be to negotiate to buy the 1st and 2nd notes at a discount where they were in default, similar to current short sales.
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