Second Loan After Sheriff Sale

[mn12345]

Hi,
I am a seller for a house that went to sheriff sale 5 month ago in MI (60K)and it only have one month for the redemption period to expire. I was going to sell the house to a buyer + a small profit who is a friend/investor. He agreed to rent the house thereafter and pay for the sheriff sale amount in cash. The bump is the title agency came back with a requirement to also satisfy the second loan in addition to the sheriff sale amount. The second mortgage is half the sheriff sale amount. I contacted the second loan morgager they said it takes 45 days to do any kind of short sale even though there loan will go into the drain after the redemption period. It also means I cannot sell the house during that period unless i find a buyer willing to pay both amounts (sheriff sale amount + second mortgage) which is impossible. Any advice?
Thanks in advance

[goingcrzy]

This doesn't sound right - your friend is going to buy the property at foreclosure, correct? or before?

If they first mortgage is foreclosing, then they are the only ones who get paid. The second gets nothing. The title is wiped clean, no second lien.

Maybe talk to a different title company?/lawyer? about this.

[mn12345]

The title company

Thanks for the reply, but I was told by the title company that I have to get a settlement from the second loan, and pay it during the redemption period before they can ok the title transfer to the new owner!

This doesn't sound right - your friend is going to buy the property at foreclosure, correct? or before?

If they first mortgage is foreclosing, then they are the only ones who get paid. The second gets nothing. The title is wiped clean, no second lien.

Maybe talk to a different title company?/lawyer? about this.

[StartingOver08]

Talk to another title company. When the first forecloses on their mortgage they wipe out all the jr liens (those liens behind them). Check your state's statutes too: http://www.legislature.mi.gov/(S(3u5...1933&highlight