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Forclosure Question

cjmazur profile photo
  • Saturday, January 24, 2004 @ 03:39 AM EST
  • 7 Comments

I have a question about foreclosing on a 2nd when there is a 1st in place.

1. Default filed on HOA Lien (2nd) for $5000
2. TS sale held, no sale, REO to beneficiary (HOA)
3. Owner of record is now HOA (????)
4. Default filed on 1st TD
5. TS sale held, no sale, REO to beneficiary of 1st


Is the Trustee deed issued in step 5, subject to the $5000 owed to the HOA.

In other words does the HOA get it's 5000 (plus interest?) out of the proceeds of the TS on the 1st or does a "secured lien" for 5K still exist?

Thanks

Comments(7)

  • no photo
    InActive_Account18th January, 2004

    If the holder of 1st mortgage forecloses then the 2nd mortgage is wiped out,along with any other liens.

  • no photo
    Tedjr18th January, 2004

    Be careful folks Some HOA fees survive foreclosure and tax sales and a lot of other sales. I do not know about where you are but here only liens that the owner takes out are wiped out with foreclosure.

    Good LUCK and Thank You
    Hope this helps some
    Ted Jr

  • cjmazur
    cjmazur19th January, 2004

    > 2nd mortgage is wiped out

    But my point is that it's no longer a 2nd mortgage. a Trustee's Deed has been issued to the HOA or the holder of the former 2nd (I use HOAs as an exaple of a 2nd, but could be Jr. debt)

    I am talking about properties in CA.

  • no photo
    InActive_Account23rd January, 2004

    I was under the impression that a foreclosure by the 1st wiped everything else out. EVERYTHING...

  • cjmazur
    cjmazur23rd January, 2004

    Me too.

    But I am getting inconsistent info from various people I ask.

    Time for more digging.

  • no photo
    rjs935224th January, 2004

    I'd be careful with terminology here. The leins aren't "wiped out" - they are however removed from the property. The owner who was foreclosed upon can still be responsible for that money owed.
    I believe this is call a deficiency judgement.

    Leins, 2nd mortgage, etc. are removed from the property at the actual foreclosure to my best knowledge.

    -Ryan J. Schnabel

  • cjmazur
    cjmazur24th January, 2004

    Agreed.

    Just an FYI.

    In CA, the lien is wiped out. TDs at least., property tax, state, and federal liens persist. I believe Judgement lien are not dismissed either.

    in CA, as a borrow, the land is the only thing pleged for the mortgage/TD/Note.

    There is not a "personal guarentee", so there is no recourse to the borrower after foreclosure. Back in the real estate crash of the late 80s, people were getting 1099s from their lenders for many $100K, for the "debt" forgiveness.

    Any hints back to my question?

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