Property has two mortgages. The first has filed the foreclosure notice, by default, and the mortgagor is now in a “delay of sale” period, which in IA can last up to six months for a homestead property. This one qualified, so now the mortgagee has to wait a full six months before they can auction it off.
Since the borrower/mortgagor AND the 2nd mortgage company were served notices for foreclosure, the 2nd mortgage is techinically discharged as a lien, right? Expunged from any lienholder’s interest, yet how does one perfect the title? Is there some paperwork that has to be filed by the plaintiff’s attorney for the 1st mortgage; something to acknowledge that the 2nd mortgage lien has been released from any interest?
Or, can they just wait until the sheriff’s auction and bid on the property then, but their lien stays intact until the auction?
This is a State by State issue you said it was in IA. I have done a few Short Sales In IA as far as what happens after the sale date to the second I am pretty sure they will have 10 days after the sale to buy out the first and if they don’t they will forfeit there position on the property. Keep in mind that over 90% of seconds will never redeem after auction.
I would personally visit my title company and ask the title manager your question after all they insure to the lender proper title… However, if you want the answers to your legal question you should hire an attorney…
I don’t mind hiring one, it’s the paying that trips me up! 90% of what I know has been gleaned from resources on the Internet, from law books on Equity and Trusts, and from observing others. Like YOU, Michael.
What should I pay an attorney when you’re smarter on THIS subject than many of the attorneys I might contact. I will, however, be going to a title company tomorrow to question them about the lien issues.