Legal Question in Bankruptcy in North Carolina

i Live in NC and would like to bid on a foreclosure. I would be bidding on a deed of trust dated January 14th 2008. The property also has a deed of trust line of credit dated January 22, 2005 for 30,000.00. Can a deed of trust line of credit be a first or is it considered a second.

Asked on 9/04/15, 12:53 pm

1 Answer from Attorneys

Thomas Zimmerman Zimmerman Law Office

Based on these facts, you would bid on the property subject to the 2005 lien. It could be more or less than 30,000.00. It is unusual to have a credit line which is a primary lien. In all events it could be a good deal. First you need a lawyer to conduct a title examination to see what all is against it. Then find out what the payoff is for all liens. It is possible to purchase the property subject to the prior lien and not suffer through a second foreclosure by the owner of the 2005 debt and be forced to pay it off to protect the equity you bought at the first sale. There are a number of lenders who have just gone away, that is, the note went into default and they wrote it off and closed the file without foreclosure. (could be PMI insurance or other reasons) the point being is that the first or more often, the second lien expires from age and ceases to be a lien. You end up owning the property free and clear. The key here is information and you end up with a calculated risk to take or avoid.

Tom Zimmerman

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Answered on 1/27/16, 11:55 am

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