1st, 2nd, Liens, And What They Mean For The Holders

Comments(6)

• 
  myfrogger17th January, 2004

  Basically the 1st, 2nd, 3rd, etc lien position is determined by the order in which they were filed at the county recorder. If a foreclosure action was to take place, the first mortgatge holder would have the right to the proceeds from the sale first before the 2nd, 3rd, etc.
  
  There is a process of "subordination" that would allow two parties to voluntarily agree that a 1st lien subordinate to a 2nd lien or such.
  
  I hope this explains what you are asking about. If not, ask for a clarification.

• 
  JonDoe20th January, 2004

  here's a more specific question...
  
  if the 2nd payor is behind in payments, but the 1st is current, can the 2nd force a foreclosure to get payment ?
  
  thanks!
  
  -J

• 
  InActive_Account20th January, 2004

  The 2nd mortgage holder can foreclose even when the 1st is www.current.It will not wipe out the 1st,but will any liens filed after the 2nd,with the exception of IRS and property tax liens.

• 
  BAMZ20th January, 2004

  J-
  
  In addition, if a 2nd is foreclosing, they will need to pay off the first in an effort to purchase the property and resell.
  
  Best of Success!
  
  BAMZ

• 
  czkathy20th January, 2004

  Regarding 2nd liens:
  I am new to the real estate world, but due to special circumstances am interested in buying the house of an acquaintance. It will be for sale at public auction by the trustee as a result of foreclosure. The owner has a second mortgage. My question: If I buy the house at auction and have the Deed, what happens to the owner's (significant!) second mortgage? Can the lender pursue the house that's now mine? The property's not expected to sell for anywhere near the amount owed to either lender.
  Thanks for any assistance...I've learned a lot just by reading the comments here.
  czkathy

• 
  JonDoe20th January, 2004

  so if 2nd is foreclosing, wouldn't it force a sale at auction, assuming no pre-forclosure deals--I thought that's what forclosures do (force auction to make debts whole)--and the proceeds would go to pay off 1st (which is current), and then 2nd (which forced the foreclosure)? and then the 3rd etc assuming there's a balance left afer paying 1st & 2nd?
  
  Or am i understanding foreclosures incorrectly? Is the purpose of a foreclosure to gain ownership of the property or to force a sale at auction to make whole on debts owed?
  
  thanks again
  
  -J