In my opinion, whether or not an offer is accepted by a mortgage company (or mortgage companies), is soley dependant upon the Current Market Value of the property being purchased. IT DOES NOT MATTER WHAT IS OWED ON THE PROPERTY!
If a home is about to go to foreclosure, and the home is located in a new development where the Builder has severily slashed prices, then the Current Market Value of properties in that development are tied into the Builder's prices.
It doesn't matter if the home owner put 0% or 10% or 20% or 25% down. It doesn't matter if the home owner obtained a 1st, or a 1st and 2nd mortgage.
The home owner purchased a home and paid $500,000 for the home. The home owner put 10% down. The home owner obtained financing for $450,000. The builder is now selling the same home for a net of $300,000. If an offer came in somewhere between $290,000 and $325,000, then the banks will probably accept the offer.
Why do you ask, would a bank accept that offer?
Now, let's say the home owner obtained a 1st mortgage for 80%. That would be $400,000. There would have to be a 2nd for $50,000.
Now, the builder has to appease it's stock holders and salvage any profits, and cut losses, and needs to dump it's inventory, at the expense of current home owners within the subdivision. They are just doing business and we cannot blame the builder.
So, the home owner can't make any more payments, the 1st or 2nd mortgage is about to foreclose. When the mortgage company forecloses, they put the home on the auction block, nobody bids on the property, and the bank will now own the property. And they paid a great price (legal fees, advertizing fees,carrying costs, etc) to now own a home that they will have to sell at an even greater discount (to compete with the Current Prices that the Builder is Selling the Same Property for).
Would the 2nd mortgage company foreclose on this property? Probably not. Can anybody guess why they wouldn't?
There are subtle "Other Conditions" that need to be considered.