Liens Remaining After Foreclosure Auction
I have a bit of confusion going on... Certainly, if I buy a home prior to the auction, and there are additional liens on the property, I inherit them and they become my problem. But when a home actually goes to auction, secondary and tertiary liens are wiped out, right? But for some reason I'm thinking that if I'm the one that buys the home at the auction, I also inherit these liens. Can anyone help?
Tax liens are not wiped out, so buyer at auction would have to deal with those, but 2ds & 3ds ARE eliminated.
Not the debts, but the liens are eliminated.
How about if you buy a timeshare at foreclosure, do you have to pay for the past maintenance fees that the previous owner did not pay? Are those wiped out also?
Thanks for clearing this clouded brain! That's what I thought.
Hi, In a foreclosure past due real estate taxes are not wiped out.
However if you have a IRS lien and they have been notified, then after a period of time and the IRS does not ask to purchase then that lien is also gone as to you and the property. It will continue to be listed against he who engendered it originaly. This also applies in Calif. to the Calif Taxing Authority known as the Franchise Tax Bureau.
Be careful if you are playing a game of eliminating taxes and seconds and other liens. If you are the person on title and after the foreclosure you go back into title. Yip all those goodies are back again.
Instructions: Do Not Mell a Title. It is allowable to give Uncle Sam a hard time, but with a care.
Lucius 8-) 8-)
The trustee here says that junior lienholders do have a right to redeem the property themselves. This goes against things I've read here and elsewhere time and time again. Does anyone know if the rules here in Colorado are just different than elsewhere? Even though I bought the first lien at the auction, can I still lose the property to junior lienholders? Of course, I understand that in the case of tax liens, then yes, I could lose it, but with deeds of trust from lenders, etc? Can they swipe it from me even though I bought the senior lien to theirs?
Yes, you can loose the property to junior leinholders but not your money. The only way for them to get th property is to redeem your mortgage. Hope you didn't pay more than face for the first.
No, we didn't pay more than face for the first. (Well, $1 more...) Is there any way to make sure we get it? I would guess just by buying out the junior lienholders that are trying to redeem, huh?
adambeal1,
This my 2 cents and is not first hand information and I am in Colorado. I have not purchased a foreclosure although I am trying to get one that we want to live in.
As far as I understand from my lawyer, any other mortgage or lien holders as well as the owner can redeem the property within the 75-85 day period. But unless you are getting a fantastic deal it is usually unrealistic for any of those to pursue the redemption.
For example, if a home appraised at $100,000 and I get it at the foreclosure auction for $85,000 and there is a lien for $15,000 from an out of state credit company, I doubt if they try to redeem it from me especially since almost everything here is selling for less than appraised value. On the other hand, if the $15,000 is a lien from a local bank they may think they can come out ahead since they have local RE and contractor contacts, etc.
Another scenario may include a 2nd mortgage holder that figures they can recover at least some of their debt by redeeming and selling through a RE agent rather than writing the entire amount off as loss. In this case I would try to make the 2nd mortgage holder a small offer to take over their position and hopefully they would accept believing the little something will be better than the big “goose egg” that seems to be coming up shortly.
Good luck.
It sounds like all of the answers are depending on your particular state. Local laws apply. I insist on using an attorney that carries the majority of his net worth in RE so I know he can answer my best questions. I like post forclosures so you dont have the leins to deal with.