When Do Junior Liens Disappear?

At what moment does any junior lien disappear? I know it's once the property has been sold, but does that mean if I (vs. the bank) buy the property at the auction, then it's considered sold? Or is it only if the bank takes it back? I just want to verify that when the auctioneer says "SOLD", they are wiped off, no matter who buys it. Am I correct, or very confused? And I also know that IRS liens stay (as well as tax liens and, I think, DSS/child support, utilities, and any other city/county government lien), but must they be recorded before the sale takes place? Or can they be added on later? I am in NC where there is a 10-day upset period, but I believe that if I upset a bid, all the same would apply as if I were the original winner at the auction.[ Edited by TheTesses on Date 06/29/2004 ]

Comments(5)

  • wannabe2129th June, 2004

    Yes...once the auctioneer cries "SOLD!", all liens junior to the foreclosing lien are wiped off of title. In some instances and states when buying at tax auction, you'll need to file a Quiet Title action...a challenge for anyone with a claim on the property to come forth and supply evidence of the claim. If you win that action, then you have a clear, unencumbered title.

    You are incorrect about IRS liens...they are wiped off of title too if they are in a junior position (first to record is first in right, usually). Now, while the IRS may get wiped off of title, they have an automatic 120-day right of redemption.

    Other liens are specific to where you are, but some involuntary liens levied by local and county governments will attach senior regardless of when they're recorded (property tax liens for instance). You'll have to research what's specific to your state...mechanic's liens do funny things here in California.

  • TheTesses29th June, 2004

    Thanks. I appreciate the info.

  • Stockpro9929th June, 2004

    I have a Short that is a little messy and so I am waiting for auction (where the bank will bid its amount owing) and then I can buy it from REO using most of the same paperwork i.e. bids, comps, etc.
    [addsig]

  • souldown1st July, 2004

    I have a questions for NC state.
    After the upset bid 10 days has gone by, does the property automatic become yours or is there a redemptin period for the the owner to redeem? thanks

  • wannabe211st July, 2004

    Quote:
    On 2004-07-01 10:50, souldown wrote:
    I have a questions for NC state.
    After the upset bid 10 days has gone by, does the property automatic become yours or is there a redemptin period for the the owner to redeem? thanks


    You need to get proficient at looking up the laws for your own state. The following citation may answer your question...

    Quote:§ 45-21.29A. No necessity for confirmation of sale.
    No confirmation of sales or resales of real property made
    pursuant to this Article shall be required. If an upset bid is
    not filed following a sale, resale, or prior upset bid within
    the period specified in this Article, the rights of the parties
    to the sale or resale become fixed. (1967, c. 979, s. 3; 1993,
    c. 305, s. 19.)


    To read the entire set of articles, just go to http://www.ncga.state.nc.us/Statutes/Statutes.asp and search under Chapter 45.

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