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Forums » General Foreclosure & Pre-Foreclosure Forums » Which liens survive foreclosure?

Which liens survive foreclosure? Subscribe to Which liens survive foreclosure?

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Tag Tags: foreclosure title lien-position auction


Josh D.

Real Estate Investor · Saint Petersburg, Florida


Forum_avatar_avatar-ang

Nov 29 '10, 07:12 AM

I'm looking to bid on some properties at the foreclosure auction (Florida). Someone told me if a junior lien holder is not named as a defendant in the foreclosure final judgment then their lien could survive the sale and I could potentially buy a property that still has a 2nd mortgage attached to it.

Does anyone know if this is true?

Thanks in advance!


James Mikel

Real Estate Investor · Dunnellon, Florida


Forum_avatar_avatar-jamikel

Nov 29 '10, 07:36 AM

It could happen but have never seen it as there are fail safes in the system of bringing a property to auction. In the process a O&E report will have been completed to establish all known interest holders in the property and an Affidavit of Diligent Search prepared and submitted to the court. I have numerous pages of information dedicated to superior liens and encumbrances on my site

Watch Out: Is the foreclosure being brought forward for the nonpayment of mortgage or that of a lien placed against the property. There is a huge difference in the order of superiority between the two. I.E. Foreclosure is due to nonpayment of a HOA lien, then there will bad days ahead if you win the bid and there is a mortgage on the property as all mortgages recorded prior to the lien are superior. There are a lot of condo association liens being foreclosed right now and the winning bidders are crying foul, in many cases, as they believed it was a foreclosure of mortgage. One person I spoke to lately paid 40k for a condo at Dade County forelcosure auction but later found there was a $240k+ mortgage to repay.

Edited: 11/29/2010 at 07:42AM by James Mikel


Josh D.

Real Estate Investor · Saint Petersburg, Florida


Forum_avatar_avatar-ang

Nov 29 '10, 07:55 AM

The property I'm looking at had an 80/20 with the same lender. The 80% lien was recorded the same day but on a lower page number in the official records. My RE attorney told me it was thus superior to the 20% loan that was recorded on a bigger page number the same day. In the final judgment the 2nd lien holder (is likely owned by someone else now) was not named as a defendant. A younger less experienced attorney told me today that lien holders not named as defendants can survive a foreclosure.

I'm calling another more experienced attorney tomorrow to see if that is indeed true. I think I'm going to have my RE attorney heavily involved in my first few auction transactions so I don't' make a $50K mistake.


Joel Owens

Commercial Real Estate Broker · Canton, Georgia


Forum_avatar_avatar-blackbelt

Pro Basic

Nov 29 '10, 08:08 AM

Most auctions are overrated. You would do much better associating with power REO brokers and making low offers on properties with clean titles already that you can close quick.




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