Does a foreclosure sale negate previous debt??

I am considering buying a foreclosed property. My search and an independent abstrator search found a lien on the property, which isn’t a problem. The confusing part is the foreclosure pay off amount listed on the legal ad is for the second mortgage amount. The first mortgage amount is not listed on the foreclosure, even though the records indicate the owner is still paying that mortgage. What is your take on what this will mean on auction day? Will the first still unpaid mortgage come back to bite me financially?

Thanks for the help,

Which loan is foreclosing?

Is it a judicial (court) or non-judicial (deed of trust) foreclosure?

I am in Georgia, which is a non judicial foreclosure state. It is a non judicial foreclosure. I found the security deed for the first mortgage as well as the security deed for the second mortgage. The foreclosure amount matches the amount for the second mortgage, but no reference in any documents I have found to the first mortgage.

anyone??? :cry:

Howdy Digitalgeorge:

Sounds like the 2nd lien holder is foreclosing. This will not negate the first lien holder. The 2nd lien holder will have to pay off the first lien or make arrangements to cure the default on that loan. If you buy the property at the sale you will have to cure the 1st or pay it off.

Also you may be able to offer the 2nd lien holder less than the amount owed and buy the lien position and then foreclose on the note yourself.