Lis Pendens from nowhere

Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes

Please anyone with experience of buying foreclosures could you help with advice in this situation?

I bought SFH in March at foreclosure auction and got certificate of title on this property. Several days ago I started to receive offers from attorneys to defend it from foreclosure. Checked in public records and indeed, found that in April someone filed Lis Pendens against of my property. From further research I figured out this record refers to mortgage done in 1993 by lender different from one that foreclosed on this house. However, that lender is not in the picture of threatening me to foreclose on my property but successor (?) who just bought the paper from him.

My question is: does second mortgage wiped out by first in foreclosure auction sale, or it has ground in court for whatever reason?

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Wayne Brooks

Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes

11y

@Lubasha WhiteTalk to an attorney/title co. You need to first determine if the new lender foreclosing is junior to the one where you bought the property. If so you're pretty good. Secondly, see if this other lender was named/served as defendant in the original foreclosure. If so, done deal and the current foreclosing lender will have to dismiss. They may not know they were foreclosed out, if they bought the note without doing good homework. If this lender is junior, but was Not named as a defendant, not the end of the world. An attorney can reopen the foreclosure and haven them foreclosed out without having to start the whole process over.

BUT.....since you say the currently foreclosing lender is from a 1993 mortgage, I'm guessing it is Not a second mortgage, not as to recording timelines anyway. But maybe there was a subordination done at the time the mortgage which was foreclosed on, was originated. Check the mortgage document online which caused the foreclosure auction you bought from, looking for a subordination from the lender now foreclosing.

@Lew Payne I'd be surprised if that holds up here, without a mortgage, since a Note gives you no security in the real estate, or the right to foreclose. Getting a judgment would create a lien, but prior to that, I don't think so.

@Jay Hinrichs Judicial proceedings only here, no Notice Of Default option, that I know of. LP with the accompanying complaint to foreclose (law suit).

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Chad U.
Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
11y
Originally posted by @Account Closed:

Originally posted by @Wayne Brooks:
@Chad U. Thanks for the input. So, this makes tax deeds interesting too, since code violations will have the same ranking as mortgages. But, since I don't recall the tax collector noticing the code violation depts. in a tax deed sale...I guess no notification means it's not wiped. Interesting.
Tax deeds here come with total buyer beware on the code violation/special assessment front. Counties are owed their costs even if they haven't yet filed a lien. You can buy a property at tax sale with no recorded lien and no way to know if there has been a citation. The lien shows up six months later, Hopefully, by then the citations are coming to the new tax mailing address. A lot can happen and a lot of dollars can be spent in six months once a property is on a code violation officer's radar. To be fair, all the county websites and tax auction cites spell out clearly that special assessments, including those not yet recorded, are not wiped out at sale. They are also exempted from title policy commitments.
The case law I referenced only applies to foreclosures, not tax sales as I understand it. So I think lien violations would remain.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
@Chad U. If code violations are not super priority liens, as the ruling dictates, then it seems they are just like any other private lien, and treated as such in Any action.
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
11y
Originally posted by @Wayne Brooks:

@Chad U. If code violations are not super priority liens, as the ruling dictates, then it seems they are just like any other private lien, and treated as such in Any action.
That's my take away too. That the super priority of the lien is gone, regardless of type of sale. But if that's true, munis could and should sell their liens. Probably at auction, as the state would likely require that any publicly owned debt be sold in a public manner and be sold to the highest bidder. What a weird thing you got going on down there.
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