First Loan gets reassigned/sold years later. Is it still senior?

3 Replies

Hello everyone,

In the case of a sherrif sale. If the primary mortgage ends up being "reassinged" years later to a different mortgage company, does that loan still remain its seniority?

Situation - Loan for 220k in 2004 resold in 2015. Second loan in 2008 for 75k. Home goes into foreclosure / sheriff sale on reassigned 220k loan. the 220k loan takes seniority and wipes out the 75k loan correct?

You need to find out what lien holder closed and what position they were in when they foreclosed. Then depending on the foreclosing lien holders position and what it sells for would determine were any potential surplus funds would be allocated. 

Originally posted by @Derek Sziga :

Hello everyone,

In the case of a sherrif sale. If the primary mortgage ends up being "reassinged" years later to a different mortgage company, does that loan still remain its seniority?

Situation - Loan for 220k in 2004 resold in 2015. Second loan in 2008 for 75k. Home goes into foreclosure / sheriff sale on reassigned 220k loan. the 220k loan takes seniority and wipes out the 75k loan correct?

All things being equal? Yes. Correct. Sounds like a first mortgage lien in 04' and a HELOC junior lien in 08'. Junior gets wiped out by the first lien foreclosure sale. No way the first would subordinate without a gun to their head. "Reassigned" is not a common term used. I suspect you just mean the loan was sold to another entity or that servicing was transferred to a different entity.