What happens at a Sheriff sale? When a property is purchased for $3,000, what happens to the Mortagage? Does it go back to the bank? If so, how do you contact the bank? I just want to know does one person hold the note and someone else hold the deed?
The sheriff’s sale wipes out all mortgages and junior liens. The new owner has the property free and clear except for liabilities because of taxes, utilities, and a few other exceptions. The sheriffs sale does NOT wipe out the notes secured by those mortgages. If a person loses a property to foreclosure the notes are still owed, but banks rarely try to collect.