Actually, it’s not necessarily a good thing that this happened before closing. if it happened after closing, and you had title insurance (which you WILL get with a Foreclosure) then you can claim that on the insurance and you wouldn’t have to deal with it.

Yeah, you’re going to have to wait for a bank to take care of the second mortgage. it could take a while.

BTW, if closing doesn’t happen when the contract says it will you can cancel the contract.

You should talk to your real estate agent/attorney, etc… not us crazy folks on YA.

plan to wait a LONG time. 2nd mortgage holders usually take a long time (or never) to reply to an offer that will totally wipe their debt off the books.

I would recommend you make an offer that pays the 2nd holder someone.

Do you mean a bank-owned home? If so, the bank probably foreclosed due to default on the first mortgage and may not have known about the second. That’s what the title search is for.

It could tae a few days or a few months no one know the answer just depends on how fast or slow they respond to the problem and fix it.

Let us guess you do NOT have an Atty or agent and tried this potentially very risky and potentially complicated process on your own.

That’s a problem with buying foreclosed homes, delays and more delays. Foreclosure should have wiped out lien of second mortgage on home, and if it didn’t they have to do so.
TALK to your attorney, to lender, to title company. Let them know you’re homeless.
We have no idea.

Be glad it was found before you signed the papers. If it was found after the papers were signed, you would be handling it, not the escrow company.