You bought a property that was subject to a $288,000 senior mortgage. You did so, I surmise, because you assumed the property would fetch more than than the balance of the mortgage, plus your cost of renovations, plus your purchase price, plus the delinquent taxes. Now, when you try to sell the property, your guess as to the property's market value was too high.
To make matters worse, the holder of the first mortgage will not negotiate with you, and instead insists on working with the original owner. What is unclear to me is whether the first mortgage holder has the right to foreclose on property that has already been foreclosed upon. I am curious if you purchased the second mortgage at an actual foreclosure sale, as you mentioned, or some other right.
Consult with an attorney in your state regarding your situation. He or she will be able to gain a better understanding of the chain of event that occurred here. Also, he or she will have an understanding of your state's foreclosure laws (each jurisdiction's laws in this are vary), and will be able to advise you precisely.
I hope this information helps you Find. Learn & Save.