[aliput]

Someone has expressed interest in purchasing my home with 100% financing--I will carry a 20% 2nd deed. The price is below market value--I backed out the real estate commission. Was curious if this person defaulted on the 1 st and the property sells at auction for more than is left, will I get the "leftovers" or will the 1st lender get to keep everything.

thanks

[Fr_Chuck]

Ok, first you have a 2nd mortgage not a 2nd deed.

If they default and the 1st mortgage holder forcloses, the houses almost never ever sell close to their value. Expect it to sell at auction for no more than what is owed on the first mortgage and normally a lot less than that.
( often the 1st mortgage holder bids the mortgage amount, so they basically pay thierself off and then they own the property)

If the house does sell for more than the sell costs and the fist mortgage, then anything over the 1st mortgage goes to pay the 2nd mortgage.

If it sells for more than the 1st and the 2nd ( and I have never seen that happen) the extra goes to the people who were foreclosed on.

But basically if you are holding a second for 20 percent if the buyers go bankrupt or if they get forclosed don't expect to get any of your money.