Question of the Week?

[Scott Phillips]

Hi George,

What happens when a property goes through the trustee auction one month and the bank is high bidder on the second lein only, then the following month the same house shows up on the foreclosure list for the first lein?

Thanks for all of the great info,

Scott

[George Roddy, Jr.]

Scott,

When a 2nd lienholder goes through with the foreclosure of their lien and they (2nd lienholder/bank) is the highest bidder then OWNERSHIP is transferred to them immediately. Now, when the 1st lienholder posts the property the next month, their lien is still "inforce". The only thing that changed from the previous month is ownership not lien priority. When a 1st lienholder forecloses the highest bidder on the steps will be deemed the owner and the 2nd lienholder highest bidder will lose "all interest" in the property. I hope the 2nd lienholder didn't pay very much for the lien, they will only have 30 days to enjoy the property.

Note- The 2nd lienholder does have the right to PAY OFF the 1st lien prior to the next auction to protect their ownership interest.

Case Study:

ARV- $100k
1st Lien- $62k
2nd Lien- $2k

If you were to buy the 2nd lien at the auction, YOU would own the property 100%, but you would need to payoff the 1st lien to own the property 100% FREE & CLEAR .

I hope this makes sense.

Now I have a question for you. I am looking for a good real estate accountant/book keeper. Do you have any suggestions?

George

[Scott Phillips]

George,

Thanks for the clarification. Happy Holidays to you guys, and try not to work until 2:00am on Christmas :)

Scott

[George Roddy, Jr.]

Scott,

Xmas or not, we're always on call!

Thank you for your patronage this year and great questions!

Can you help us out? I would value your opinion on real estate cpa?


George

[Scott Phillips]

Sure, just let me know.

Scott

[George Roddy, Jr.]

Thanks.


George