Foreclosure University Forum


(?) Buying a foreclosure at trustee auction-home has HELOC.

by foreclosureuniversity ⌂ @, Tuesday, May 18, 2010, 17:54 (3604 days ago) @ spizzi

� Hi all,
� I am in Arizona and did a title search on a home that keeps getting
� postponed at auction because it is currently going through a home loan
� modification review with the Beneficiary (Lender). Upon receiving the
� title search results and unless I read the results incorrectly, it has
� been noted there are two loans associated with the home address and
� subsequently the home owner. The first is the original loan with Bank-A
� in Year 2006 for around $600K, the second is a Deed of Trust Home Equity
� Line of Credit loan with Bank-B secured in Year 2007. Note: I am
� indicating there are two different banks involved with these loans Bank-A
� and Bank-B respectively.
� So here's where I am looking for some clarification. If Bank-A is the
� primary Lender (Beneficiary) and is the one that is currently postponing
� Trustee Auction due to reviewing the current Home Loan Modification
� application, AND Bank-B has what appears to be a lien on the house as well
� (I didn't know HELOCs can also be a lien on a home>>), THEN is it possible
� for Bank-B to come after ME assuming I purchase the home at foreclosure
� Trustee Auction> Are there any protections for me as a buyer> Anything I
� might be missing and need to investigate further>
� Thanks in advance!

If you are the bidding on this property at the auction, your biggest concern is making sure the 1st is the one who is foreclosing and your not bidding on the 2nd mortgage. If the first is foreclosing and you are the winning bidder, the money from the auction will first go towards paying off all the senior lien holders (property taxes, 1st mortgage, legal fees). If there is any money left over, it will go to the 2nd bank or lien holder. They cannot come after you as the buyer, they will pursue the homeowner who's name is on the loan. More than likely they will 1099 the homeowner for the loss.

Good Luck

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