Hi. I read that liens on foreclosed properties must be paid by the new owners. My questions is this - if my sister were to purchase my property from the sheriff auction, will she have to pay the lien on the mortgage if that lien was a business loan (kinda like a third mortgage) ? Or are they only referring to liens like taxes, etc?
-
-
Your initial assumption is wrong about new owners paying liens on foreclosed properties.
The foreclosure process extinguishes all subordinate liens to the 1st mortgage. However, if the bid on the property is high enough and there is more many available that is required to pay the 1st mortgage, than the next lien holder gets some, and so on down the line. -
Thank you for responding, HHM. It's just that I've been browsing a couple of forums, and some say that all jr. liens are wiped out if it is the first mortg company doing the foreclosing, while other sites "warn" buyers to do their research and search for all liens attached to the home before purchasing on the steps of the courthouse, as buyers will be responsible for paying off the liens to get a clear title. just a little confused here, but want to make sure my sister isn't going to be stuck with having to pay off the 2nd mortgage AND the business loan if she were to purchase the property.Comment
Comment