Re: After the foreclosure sale - Posted by Ed V.(baddog)
Posted by Ed V.(baddog) on July 19, 2003 at 24:48:25:
THE BASICS!!! You do need to know the process in your state but it is all basically the same. First, taxes have been around longer than any mortgages so that is always the #1 lien. Then you have liens of all kinds from a main mortgage all the way down to the lien the contractor put on your house for not paying the $50 you owed him(that’s just an example.) Now it depends on which lien wants to forclose. #1.TAXES Depends on state. Here in Idaho, tax lien placed on property after 3 years delinquent, try for next 2 years to bring up to date, then sold on courthouse steps. Lots of factors. All of the other lien holders are notified and have a certain time to respond in. Those that respond are added to the money pool along with back taxes and penalties, that’s the starting price for the auction. Those that failed to respond in time are erased. Some states have tax lien certificates where you pay the delinquent taxes for people according to that states process and you become the #1 lien holder. After a certain time, depends on state, You can forclose. There again all other lien holders are notified and must respond. #2 MORTGAGE Basically all the same, depends on state. All other lien holders are notified and must respond in a certain time frame to add there bill to the bidding process.Usually starts the bidding at all of the totals added up. Taxes must always be paid in full, then next lien holder gets his money, then next until the money runs out. They all hope they get there money but sometimes the money isn’t enough. After that sale the slate is wiped clean. Then it just starts over again, TAXES, NEW MORTGAGE, HOME EQUITY,ETC. By the way, depending on the equity or the other lien holder positions, the lien holders,especially the banks that are owed most of the money, are the ones that usually buy back the property to protect their position. #3,#4,#5 etc. lien holders can forclose on a property if all the requirments for that state have been met. HOWEVER, they must satisfy in full all of the other lien holders that are in higher positions then they are.
Anyway to get to your question, after an auction all of the liens except for taxes are gone because you just paid them all off. Maybe. Some auctions just don’t happen if the minimum bid is not met. The way liens remain on a property is if the winning bidder has set up with the lien holders to accept these liens and keep them current themselves. Once again, find out how it works in your state.