Lien position and foreclosure

By
Real Estate Agent with 24/7 Realty Inc.

Liens have positions on the title to property, 1st, 2nd, 3rd etc.  A 2nd mortgage lien holder can foreclose on a property but their foreclosure action is subject to the lien of the 1st lienholder.  So if someone where to buy the home at the auction or from the lender as an REO they would still have to pay off the 1st mortgage lienholder.

Conversely if a 2nd lienholder where to foreclose on a property with 3 or more mortgage liens then every lien, mortgage or not, with the exception of taxes recorded of record on the property after the date of 2nd mortgage would be exstinguished by the foreclosure action of the second mortgage holder.

So when a 1st postion mortgage holder forecloses they extinguish all liens that are subsquent to them with the exception of taxes. 

Looking to buy a foreclosure in New York, contact me at www.247REOREALTY.com

 

 

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Ambassador
1,463,310
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection
This is information that some who are rushing to buy foreclosure should be aware of.  As experts a part of our service is well spent educating the marketplace.
Jan 27, 2008 03:40 AM #1
Anonymous
Anonymous
Jeff - Very informative, as always!  Thanks for posting this info for us on AR!
Jan 27, 2008 07:31 AM #2
Rainmaker
88,900
Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES
Jeff, that scenario works only in states that allow a JR Lienholder to instigate foreclosure. The majority of states are Sr. Lienholder states that allow only the Sr Lienholder to instigate foreclosure. In other words these states will not allow a 2nd or 3rd lien holder to move forward until they have bought out the 1st Lienholder prior to statrting foreclosure.
Jan 27, 2008 08:46 AM #3
Rainmaker
312,272
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move
It sure can be a mess!  Buyers need to really know what they are doing before they walk into a mess!
Jan 27, 2008 08:59 AM #4
Rainer
12,294
Kevin Whitty
Poughkeepsie, NY
Buyer beware.  Thaks for the info
Jan 29, 2008 10:56 PM #5
Rainer
105,010
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Jeff.. I have seen more seconds jumping the gun and filing first....I guess they are getting a bit pissed at just being written off...good info!

Jan 30, 2008 08:04 AM #6
Anonymous
Anonymous
Very good info.  It is good to know to pass on to clients.
Jan 30, 2008 09:55 AM #7
Anonymous
MJ

Does Bankruptcy (chapter 7) extinguishes Real estate Mortgage Liens on the property title?

Apr 11, 2008 03:08 AM #8
Rainer
8,145
Susan Vanderburgh
Utopia Management - Murrieta, CA
Does anyone here have info about the junior liens filing first in CA?
Apr 11, 2008 03:51 AM #9
Anonymous
Anonymous

I'm in the same position.  We are not and never have been a single day beind on our home mortgage, but we are months behind on our business bank loans that have 2nd and 3rd leins against the house.  Now those jr. loans are screaming foreclosure.  I don't how that is possible if we owe the 2nd loans like 100k and our mortgage is for 200k.  It doesn't seem like it is to their advantage to foreclose on our home if they have to pay the 1st lein holder.

Jan 10, 2009 10:04 AM #10
Rainmaker
334,301
Andrew Monaghan
Your Phoenix Home Source - Glendale, AZ
CRS, GRI, EPro Associate Broker

There is ccases in AZ where if anybody above the 1st forecloses the HOA must be paid.

Jan 10, 2009 11:10 AM #11
Anonymous
Ny lien

Hi there

 

Hey site has explained all help nicely.

 

Thanks

Donald

 

 

 

 

Apr 19, 2011 06:12 AM #12
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Jeffrey Dolfinger

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