Foreclosure Sale With Multiple Lenders

[Guy T.]

I live in Maine. I am in the foreclosure stages and have a question. I have a 1st and 2nd mortgage. The 1st is current and the 2nd is foreclosing I have been served with a summons and complaint and do not plan on attending. Now I know they will get a judgement and then I start the 90 day redemption period. My question is befoe the 2nd mortgager is allow to sell my property at public auction after the redemption period is over, do they have to pay off the 1st mortgager holder, so at the sale they (2nd mortgager) have a clear title.?

[Mr. Knowitall]

The property would normally be sold with the proceeds applied first to the primary mortgage, and next to the secondary mortgage.

[Guy T.]

With that being said, what happens if the sale does not produce enough to pay off the 1st mortgager. Here in rural Maine the only people that show up at this type of sale are the lenders. Example Let's say the 1st mortgage is $35,000 and the 2nd is $20,000 and the property is worth less than $40,000.

[seniorjudge]

With that being said, what happens if the sale does not produce enough to pay off the 1st mortgager. Here in rural Maine the only people that show up at this type of sale are the lenders. Example Let's say the 1st mortgage is $35,000 and the 2nd is $20,000 and the property is worth less than $40,000.

If the sale of the second doesn't get enough to pay off the place, the first could foreclose and completely wipe out the second.

[Guy T.]

Now you are NOT making any sense.

Senior Judge says If the sale of the second doesn't get enough to pay off the place, the first could foreclose and completely wipe out the second.
The 1st can not foreclose because I am current with payments. They have no reason. I have talked to them and they would NOT foreclose.

Then you say If the junior (i.e., 2nd) lender forecloses and sells the place, the buyer gets the place with all prior (i.e., senior) liens.
No body inthis area goes to these auctions except the lenders. Remember very rural. Also the 1st would demand payment from the 2nd if they were the bidder.

And Mr knowitall say this The property would normally be sold with the proceeds applied first to the primary mortgage, and next to the secondary mortgage.

I appreicate your comments but why do they not match. Are you guys just guessing.

If the 2nd mortgage is $20,000 and they bid only $20,000 to protect the judgement and those proceeds go to the 1st mortgage holder that would be stupid to bid in the first place. And I am sure the 2nd mortgager is not going to bid $55,000 to pay off the 1st when the property is only worth less then $40,000 at the most.

So with that said I will guess like you guys did and say that the 2nd mortgager will get the judgement and then place a lien on the property so if in the future, it is ever sold they get the lien paid that way. They know I am 71 and in bad health and there is no way they can collect and money from me directly Soc Sec benefits only.

[aaron]

Sr. is probably anticipating that there is a clause in your contract with the first lender under which any foreclosure related to the property constitutes a breach giving them the right to foreclose.

[seniorjudge]

Now you are NOT making any sense.

Senior Judge says If the sale of the second doesn't get enough to pay off the place, the first could foreclose and completely wipe out the second. See Aaron's comment.
The 1st can not foreclose because I am current with payments. They have no reason. I have talked to them and they would NOT foreclose. That is a good thing.

Then you say If the junior (i.e., 2nd) lender forecloses and sells the place, the buyer gets the place with all prior (i.e., senior) liens. Correct.
No body inthis area goes to these auctions except the lenders. Remember very rural. Also the 1st would demand payment from the 2nd if they were the bidder. I cannot imagine a situation where a first lender would spend even more money on the place by bidding at the auction, but anything is possible.

And Mr knowitall say this The property would normally be sold with the proceeds applied first to the primary mortgage, and next to the secondary mortgage.

I appreicate your comments but why do they not match. Are you guys just guessing. No, not guessing.

If the 2nd mortgage is $20,000 and they bid only $20,000 to protect the judgement and those proceeds go to the 1st mortgage holder that would be stupid to bid in the first place. And I am sure the 2nd mortgager is not going to bid $55,000 to pay off the 1st when the property is only worth less then $40,000 at the most.

So with that said I will guess like you guys did and say that the 2nd mortgager will get the judgement and then place a lien on the property so if in the future, it is ever sold they get the lien paid that way. The second already has a lien on the property. They know I am 71 and in bad health and there is no way they can collect and money from me directly Soc Sec benefits only.

**********

[seniorjudge]

I live in Maine. I am in the foreclosure stages and have a question. I have a 1st and 2nd mortgage. The 1st is current and the 2nd is foreclosing I have been served with a summons and complaint and do not plan on attending. Now I know they will get a judgement and then I start the 90 day redemption period. My question is befoe the 2nd mortgager is allow to sell my property at public auction after the redemption period is over, do they have to pay off the 1st mortgager holder, so at the sale they (2nd mortgager) have a clear title.?

If the junior (i.e., 2nd) lender forecloses and sells the place, the buyer gets the place with all prior (i.e., senior) liens.