We are facing foreclosure on the first lien originated from the original owner on a building in Oregon. We previously held the second lien and became the owners upon us foreclosing on the original owners. Now we find ourselves with a loan that is $500,000 more than the property is worth.
If I understand you right, you bid at foreclosure sale on a second mortgage where you were the mortgagee, but now are facing foreclosure of the senior lien.
Without looking at the documents involved, there's no intuitive reason that the senior lien would need to be reduced. When you bid at the foreclosure sale, the senior lien was known. If you bid too much, that is not the fault of the senior mortgagee.
There may be defenses in the documents and negotiation that can happen with the other mortgagee to work out a modification or alternative to foreclosure. You should seek an attorney with experience in these matters.
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