Ok, i’m a total newbie at this, so I wanted to understand the process better. Assuming a lender forecloses on a property and there is a second mortgage on the property, when someone buys that property at auction, do they also buy that second mortage and have to pay it?
I would assume any taxes owed would also have to be paid.
How do federal tax liens work into this?
Thank you in advance!
No. What you pay at auction covers all the mortgages. 1st position gets paid, 2nd gets what’s left, if anything, 3rd gets what’s left, so on…
No. Different process. You have to pay them, but not necessarily at the foreclosure auction.
Don’t even go there, whole different ball game.
Ok, what you’re saying is that if a person has a 1st mortage for $150k and a second (or heloc) of $30k and the auction goes for $160k:
the first would get paid off, the second would get $10k and the person who bought the property at auction would not owe an additional $20k?
Is this a federal law or does it vary state to state?
I am relatively new to this as well, but from what I understand, you are correct. House auctions for 160k, then the 1st loan is paid in full, and the remaining 10 k goes towards the 2nd. The lender in 2nd position is screwed out of the rest of the 20k.
This, from what Ive heard on here, is why lenders in 2nd position are so willing to shortsale on the 2nd. Its better that they get something than nothing at all.
GRegg
This is the fundamental basis of the mortgage system. He whom records first has a superior position to all others and must be paid off before any inferior positions are reimbursed. It is why 2nd and 3rd mortgages charge higher interest rates to offset some of this risk.
Ok…let me make sure I’ve got this…I understand the concept of a 1st and second (HELOC)…but I want to be sure. There’s an auction coming up. The opening bid is $6,809.25. Now according to my websearching of the county records, this house was passed down to a husband and wife, wife gets sole possesion in '83. In '92 borrowed $25,300. In '98 borrowed $38,700. In '01 borrowed 38,300. Now according to the county’s website house will be foreclosed on monies borrowed in the year of '01 = $38,300. I understand borrowing the first time. Was she refinancing the 2nd and 3rd time from the well? My question is… at auction will only one mortgage be foreclosed on ?
Only one mortgage will be foreclosed on at the auction. However, you must be sure that it is for the 1st.
If it is a 2nd - then you would be responsible for the 1st as well.
In this case, the 3rd is foreclosing, so you’d be responsible for the other two at 25,300 +38,700 = 64,000
hey guys i know this a is a bit of subject, but can some of y’all give me advice on how do navigate or use the county records websites. I’m have a bit of trouble on mind in San Antonio
Property taxes & federal tax liens against a property survive a foreclosure right? If there is a federal tax lien, what type of document would that show up as (deed of trust, etc…)?
Just trying to figure out the whole title searching thing…