Super Lien vs Junior Lien Priority

3 Replies

Hi-- I'm researching a foreclosure auction property. I'm still very much in the learning phase and have only bid on one property (didn't win it.)

If I won this auction, and say the price was $50K, would I also be responsible for the Junior Lien of $13k?

Many thank you's from the bottom of my newbie heart!

Mark...

@Wayne Brooks  can probably help you out. I hate to stick my nose in a different state because the laws vary vastly from state to state. In general, when you win a bid on your super lien (here we refer to as 1st lien) the junior lien(s) get wipe off (not wipe out). All in all, you're not responsible for any liens recorded after the lien you bought. 

Example: You bought the 1st lien, you're not responsible for the 2nd and 3rd liens. If you bought the 2nd lien, you're responsible for the 1st lien, but not the 3rd lien. Whenever you're buying a junior lien, you're taking title subject to senior lien(s). Well, at least that's how it works in CA. 

Good luck. 

yes they are wiped out, as long the junior liens were named as defendants in the foreclosure, and served.

So I've been buying first liens at trustee sales in California, but have not touched the junior liens.  If I buy a junior lien are you saying I take title, and then I can pay off the first lien?  Is that a hard process?  Does the debt go in my name?  Or does it stick with the original borrower?  Do I have to get permission from the borrower to pay off their debt, or can I just do it by calling the bank and handing them a check.  

Also, it's been hard to find the exact amount of the 1st lien and the payoff (when junior lien is up for auction).  I can see through title when the lien was taken and how much it was for, but how do you find out what the payoff amounts are?  There could be huge penalties that have accumulated over time if the borrowers was defaulting on both the senior and junior liens. 

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