What is the best strategy for pursuing the purchase of a property when the 2nd is foreclosing? The sale is scheduled soon so I need to act quickly.

Asked by Jay Myers, Orange County, CA Mon Feb 20, 2012

In a surprising development the property taxes which had been in arrears for 2 years were just brought current. Why would this have been done by the owner?

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Heather Paul, Agent, Santa Monica, CA
Thu Feb 23, 2012
The first mortgage company may have paid them or the seller, but most likely it was the first mortgage. Only consider bidding on properties when the first mortgage is foreclosing or you could get burned badly. The 2nd or junior liens always get wiped away, but if the 2nd mortgage is foreclosing, the first mortgage still goes with the property. You really should have an exclusive buyers agent helping you, good luck!

Have a great day,
Heather Paul, Realtor
Coldwell Banker
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Tue Feb 21, 2012
The tax liens may not have been paid by the seller, in fact they probably were not. One of the lenders may have paid them.
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Jonathon Vil…, Agent, Norwalk, CA
Tue Feb 21, 2012
Depends on the actual circumstance of the sale. There is a reason why as to only the second is foreclosing and why the home owner is bringing his property taxes current. It would appear to me that the home owner fell on some hardship and is now stable. If the property has equity there is a good chance the owner is simply trying to negotiate a payoff for the 2nd and just have a first. That just some strategy used by homeowners to make the bank settle for a amount less than owed.

If you can give me for information I can definitely check this property out in more detail and design a plan for you to purchase it if it is in fact a reasonable deal.

Jonathon Villaescusa
Operating Principal/Realtor
Excellence Real Estate
Cell: 562-652-7667
Web Reference:  http://ExcellenceDuo.com
0 votes
Janey Bishop, Agent, Calabasas, CA
Mon Feb 20, 2012
I agree to submit a short sale offer soonest assuming the Seller has a realtor to submit the Short Sale package. Then the realtor has to notify the second to postpone the sale date.

The lienolder is going to end up having to make the taxes current so this rolls it in to the outstanding mortgage balance and provides the best chance for the first to recover the funds.
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Guy Gleason, Agent, Los Angeles, CA
Mon Feb 20, 2012
Hi Jay,
Have the seller file a BK, ( find someone who can do it relatively cheap --- I know someone who will do this who is also knowledgeable in the short-sale foreclosure process and charges like $600 ) this will postpone the trustee sale, that will buy you some time to get the short-sale process moving forward, figure things out, hire and agent or whatever,

although some lenders won't proceed forward until the BK is discharged --you will at least have things in place because lenders WILL usually postpone a trustee sale date if there is a signed purchase agreement in their files - but you avoid having the potential loss of the property while scrambling ..........BK postpones only , not eliminates.

I have used this techique of BK several times.....its a tool

hope this helps



0 votes
Douglas Perez…, Home Buyer, Los Angeles, CA
Mon Feb 20, 2012

Is there an agent involved? Do you have a purchase agreement with the owner? ..... Has the owner files a BK?
First, get into a signed purchase agreement with the owner. It seems that the owner is in some sort of financial hardship. Contact all lien holders to negotiate for short sale approval and close it.

Douglas Perez
0 votes
Meredith McK…, Agent, Pasadena, CA
Mon Feb 20, 2012

With all due respect to Emily's comments, you have stated that the SECOND is the lender who is foreclosing, not the FIRST. If the first has not begun a foreclosure procedure and just the second is foreclosing, the process will not necessarily follow the path she has outlined.

Based upon the facts you've given, I stand by my answer, with the added recommendation that you contact a real estate attorney or broker/attorney to assist you, should you decide to negotiate with the 'foreclosing' party.

Good Luck!

Meredith McKenzie
Keller Williams Realty
0 votes
Emily Knell, Agent, Huntington Beach, CA
Mon Feb 20, 2012
Don't do what Meredith is saying to do, if you just go out & buy the 2nd note & then you LOSE to another investor on the courthouse steps, where are you then? You're the owner of a 2nd note with an owner who just got foreclosed on & now it is owned by someone else. That's just stupid.

If the 2nd lien holder is foreclosing, this means that in a foreclosure sale the 1st will be paid off in full. Maybe the ENTIRE balance is the 2nd lien is still much higher than what the property is worth?

It is ONLY going to be in a successful short sale negotiation that you're going to be able to get the property for Less than Fair Market Value & the 2nd note holder being acceptable of a SHORT PAYOFF.

If you don't have an agent you're working with on this, please contact me asap OR if you don't do that, you need to be in contact with the Owner right now, then get a Realtor involved so you can present a short sale offer to the 2nd lien holder before they take it to auction.

AND, if the 1st lien holder was the one who just paid the property taxes current, the owner will need to get a current DEMAND statement from the 1st to see what the new loan balance is & whether or not this will affect or not affect the 1st being in a Short position or not.

Shoot me an email directly if you want to talk about this some more. I don't look back on this same Trulia thread for answers posted after mine.

562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes
Armik Avedi…, Agent, Glendale, CA
Mon Feb 20, 2012
Hi You have a agent and property may in also in short sale, they can write a offer and forward it to the bank, at that time the bank may postpond the sale to work on the offer presented. But all this need to happen veryfast.

call me if you need any help. Good luck 818-795-0618 armikrealtor@sbcglobal.net
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Meredith McK…, Agent, Pasadena, CA
Mon Feb 20, 2012
Dear Jay:

Based upon the facts you've provided, the best strategy is to go directly to the 2nd, buy out their note, then step into their role as the 2nd and acquire the property through the foreclosure sale.

Good Luck:

Meredith McKenzie
Associate Broker #01142186
Keller Williams Realty
1660 Hillhurst Avenue
Los Angeles, CA 90027

C: 323-230-9749
O: 323-300-1110
F: 323-300-1001

0 votes
Travis Noe, Agent, Gladstone, MO
Mon Feb 20, 2012
Present an offer to the Seller if it satifies the 2nd have him call the lendor and let them know. I have stopped many this way. If it does not satisfy the 2nd try to have the seller work out a deal with the 2nd. Most of the time in a foreclosure the primary will only offer the second 1k and the second refuses it. So offer more than that but not the whole amount, they know that usualy especialy in todays market they will get nothing if it is foreclosed on because there is usualy nothing left over after the primary is satisfied.

2nd question: the primary or secondary probably paid the taxes to avoid the county selling it on the court house steps. In my area 2yrs in arrears is when the County takes action
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