Foreclosure Help

**Chief Tutor** · 02-08-2008, 06:28 PM

OK,

Here is the deal. My house just went pending and I am looking at a pre-foreclosure property. The Property goes to auction at the end of the month. I am interested so I call the trustee running the sale. He refers me to the agent handling the listing in regard to all my questions. I do a little research and find that there is a fist mortgage held by a known bank.

But get this, the second lien(or third if you count the tax collector), is held by the agent in charge of foreclosing on the property? This seems to me a blatant conflict of interest.

I am interested in the property but not at a value of paying the taxes, the first mortgage and the second mortgage. The total value of these 3 is more than the property is worth. And to be frank, the outstanding taxes and first loan is more than the property is worth.

So, how do I get around the agent and make a deal with the bank. I understand that if the agent can convince someone to buy his position, he gets his money, and the buyer is in position to pay the outstanding taxes, outstanding mortgage payments and refinance the loan. But I reall doubt that will happen.

Anyway the questions I have for the group is as follows:
1) Is the agent of record for the foreclosure proceedings and holding the second mortgage involved in a conflict of interest?
2) How to I get around him, without making the situation worse.

Thanks for your assistance. BTW, I like the property because it is new construction and vacant. Seen it, like it and more importantly, my wife likes it.

**RobM** · 02-09-2008, 07:54 PM

The bigger question is is it worth getting involved in something like this that could bit you in the butt down the road

**Mike Taylor** · 02-12-2008, 04:36 AM

You will not get around the agent and deal directly with the bank. Won't happen. You could reveal to them that the agent has a potential conflict of interest, but by the time anything happens it will already be foreclosed.

**carlam** · 02-17-2008, 04:16 AM

You said it best, not worth the money... nor is it worth the time to get this all straightened out. I would find something else to invest in.

**TomAnto** · 02-17-2008, 08:24 PM

Blatant conflict of interest is more like it. There must be enough equity for the 2nd mortgage holder to be interested and oh hey guess what, he gets to see all the bids. Unbelievable! The homeowner is about to get completely screwed here. The agent should lose his/her license for this. The sad thing is that with the increase in foreclosures courts will have a harder time monitoring this. You get around him by turning him in.

**TomAnto** · 02-17-2008, 09:27 PM

The more I think about this the more irritated I'm getting.

What jurisdiction is this occurring in?
Is this a judicial foreclosure?
How many lien holders are there?
What is the loan to value ratio?
What is the timing of the auction?

**brechtp** · 02-20-2008, 08:51 AM

In some states like Maine, a broker can put a lien on a property like a contractor would, like a mechanics lien, in order to protect their interest. Is that what you're seeing on here? the likelihood that the bank would happen to be working with a broker who has a lien on the property outside of what I've described seems really low.