Wholesaler · Phoenix, AZ · Member since 2012 · 38 posts · 4 votes
I like to purchase a home which was foreclosed on and went back to the bank. A wholesaler picked it up and advertised it as off market sale. There is a Lis Pendens filed and a Mechanics Lien prior to the foreclosure auction. Are these lawsuits wiped out at foreclosure sale in Arizona? Please advise, thank you
Point #1: All real estate laws are local unless dictated by Federal legislation.
Point #2: Short answer, no.
Here is a more accurate answer as it really occurs. Most, but not all, states treat Junior Liens similarly in that the debt is wiped off title of the foreclosed asset but it is not wiped 'out'. That mean that the debt may remain debtor's obligation depending on the type debt.
As to the Lis Pendens, again this depends. If it was part of a judicial foreclosure then it would (presumably) be extinguished after completion of that forced sale. If it was a Lis Pendens (which is really just a notice of a pending lawsuit) then it may very well remain but not affect title unless an Order for Stay or specific claim as to title.
Most bonafide 3rd party purchasers at trustee sales here in CA learn to sally forth and deal with the detritus post sale, but only after pulling and reading the complaint.
Wholesaler · Phoenix, AZ · Member since 2012 · 38 posts · 4 votes
11y
Thank you for your advice and sorry about posting it in this forum. The other day I was told I should have put it in the Marketplace, I'm fairly new to BP and will get it straight one of these days. The seller will send me a different Purchase Contract today, let me see what this one reads, I may be right back here and ask for further help. I'm glad this forum exists!