Liens after foreclosure. - Posted by Tim W. (NJ)

Posted by Stacy (AZ) on June 02, 2000 at 16:48:33:

Hey Steve. I just emailed you today.

Bizzy, Bizzy, Bizzy…

(oops gotta go, the baby’s crying)


Liens after foreclosure. - Posted by Tim W. (NJ)

Posted by Tim W. (NJ) on June 02, 2000 at 15:08:26:

Went looking at a REO SFH today and upon entering the yard, a neighbor woman said she tried to buy the house, but found out that there were still existing liens on the deed. I axed her if she was represented by an attorney, she said no.

I’m confused, When a bank with a first forecloses, does that not wipe away all other liens and subordinate mortgages on the property??? It’s my understanding that while the notes and mortgages may still be enforceable and collectable, they no longer encumber the property?

This girl was willing to pay full axing price ($79K), but backed out after she was told that the property was loaded with liens.

if a lien holder is NOT notified in foreclosure, then their lien survives! … - Posted by David

Posted by David on June 05, 2000 at 05:59:07:

… may vary in your state.

Re: Liens after foreclosure. - Posted by Ben (NJ)

Posted by Ben (NJ) on June 02, 2000 at 17:27:39:

It is immaterial which liens currently exist on the property as long as they get paid off at closing. Tell your attorney that of course you expect the bank to deliver free and clear title and you will not accept a quit-claim deed or the like. All junior liens should have been wiped out but anything senior to the mortgage may still exist (tax liens, etc.). If they can’t deliver clear title there is no deal, its as simple as that.

One possibility - Posted by Bud Branstetter

Posted by Bud Branstetter on June 02, 2000 at 16:05:24:

If the back had accepted a deed in lieu of foreclosure then those liens would still be there. Another possibility is that they are some type of governmental lien which would stay there even after a foreclosure. The IRS may have filed a lien but the foreclosure would have give them a right of redemption. When you buy you get title insurance.

Re: Liens after foreclosure. - Posted by Stacy (AZ)

Posted by Stacy (AZ) on June 02, 2000 at 15:49:49:

There are differences in each state’s statutes, but I would be surprised if any subordinate liens remained after the foreclosure. You may want to check further. Even calling the bank who owns the REO may give you some answers. Either way, buying title insurance is a good idea, and you could always back-out with no penalty if any unexpected liens pop up. The liens should have been “axed”.


Re: Liens after foreclosure. - Posted by Chicago Steve

Posted by Chicago Steve on June 02, 2000 at 16:44:50:

Hey Stacy, Where U been hidding?