Does HUD Subordinate Deed Survive a Trustee sale at the auction?

5 Replies

Hello BP Friends,

I have 2 properties under review. Both have a small 14k and 7k loan in 2nd positions from govt agencies. I would like to know if they will survive through a trustee sale?

One has a 2nd position lien (by recording date) but it looks like a standard document with

"GEORGIA - SUBORDINATE SECURITY DEED 10/97 - HUD INSTRUMENT"

at the bottom.

I dont see any other text on the deed making itself a senior position deed.  Will this survive through the trustee sale?

Second one:

It has a 2nd position lien (by recording date) from GHFA Affordable Housing Inc but it has a clear paragraph with the text:

Senior Lien Indebtness: Means the security dated 6/1/2010 under Book...Page...Known as First Mortgage Loan and the loan dated 3/13/2014 under Book...Page Known as Second Mortgage Loan collectively referred as Senior Lien Indebtness. This Deed is subordinate to the Senior Lien Indebtness.

Does this paragraph mean this 2nd position loan will survive?

Thanks in advance!

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@Rashid S. ,

Here's the breakdown:

"Sub-" means "under", "below", etc.

"-ordinate" refers to sequence or order of occurrence. 

That is, a "subordinate" lien was recorded subsequent to (after) the senior (earlier) liens.

The text you quoted, then, is probably just an acknowledgement that this lien is a junior lien with respect to any recorded before it.