What are the drawbacks to buying a mortgage at discount on a property already being foreclosed on?

Income producing property worth $200K to $230K - 1st Mortgage owed $240K in default and already approved to go to auction - 2nd Mortgage balance $25K - First Lien Holder has agreed to sell the underlying mortgage for $170K. What are my investors options here? Is he better off buying the note and continuing to Foreclose or what? I'm not really sure how best to advise my investor. Thanks in advance.
In Buying Property - Asked by Scot K. - Feb 10, 2011
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Rob M.
Lender/Mortgage Broker
Houston, TX

What about the 2nd Lien? If that is in place there is still $195M of debt remaining on $200M property. How much income is being produced?

Feb 10, 2011
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