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rayh78
188 Posts
Member Since: 02/18/2003
Hampton, VA
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Posted: 18:03 on 09-04-2003
Why a title search before buying at auction. If the first foreclose then the 2 nd gets wiped out but not all liens?
Is it correct that the 2 nd note holder has less protection than others?
If owners have a judgement against them for a medical bill ,mechanics lien or water bill this lein is not wiped out with foreclosure and this is one of the reasons why you need a title search before bidding at auction?
So you only have to worry about the 1 st and the other liens but not any 2 nd mortgage?
Thanks
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Sash
174 Posts
Member Since: 07/01/2003
Corona, CA
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Posted: 18:19 on 09-04-2003
Not ALL liens get knocked out at an auction. The laws regarding liens vary from state to state.
Someone else here may be able to contribute more.
Mike
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MrsMeltzer
297 Posts
Member Since: 07/30/2003
Roswell, GA
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Posted: 19:25 on 09-05-2003
The big thing is IRS liens. They are NOT wiped out at the foreclosure sale.
Hope This Helps,
Mrs. Meltzer
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SmileyFace
393 Posts
Member Since: 08/25/2003
Lawrenceville, GA
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Posted: 12:03 on 09-07-2003
Mr. Melzter is right. Any government liens will not be wiped out. I don't even think any judgements will be wiped out either. 
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lorien
77 Posts
Member Since: 09/01/2003
Montrose, MI
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Posted: 09:58 on 09-08-2003
*pokes SmileyFace Junior Investor*
that's MRS MELTZER ya goof!
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MrsMeltzer
297 Posts
Member Since: 07/30/2003
Roswell, GA
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Posted: 12:25 on 09-08-2003
Judgements, State tax liens, Property tax liens, etc. none of those are wiped out. ONLY the junior mortgage is wiped out when the senior mortgage forecloses.
Thanks Lorien! You're sweet!
MELTZER as in a Cheese MELT and a SELTZER combined.
As long as you are paying me a compliment, call me anything ya want!
Mrs. Meltzer
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Realtyfish
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Posted: 22:03 on 09-11-2003
If you take out a $150,000 mortgage on a house and two years later take out a home equity loan or line of credit, you have two different mortgages. If for some reason you as a mortgagor felt you only needed to stay current on the first mortgage, you might let the smaller loan default. Now an investor comes along and sees foreclosure notices pertaining to the 2nd mortgage and sees it as a great deal....until they research and find out there is a 1st mortgage that hasn't defaulted yet. The investor calls it quits on that one immediately if the margin is too small. So you see, it doesn't matter if it is a first or second mortgage. You only need to concern yourself with total encumberances upon the propery you are interested in. Just because one of the mortgages hasn't gone into default doesn't mean they won't remain with your property. As far as lien's..it doesn't matter which lien is subordinate to which lien. They will all cloud your title or freeze it eventually unless they are removed before you purchase the property. I hope this helps your lien question.
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Realtyfish
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Posted: 22:18 on 09-11-2003
I forgot to mention, most mistakes in judicial foreclosures are when investors don't dig deep enough to find other mortgages. I have knowledge of one person in my county that purchased a Sheriff property (Iowa) and learned that a second mortgage was attached to the title after he forked over the cashier's check. In this county, no deposits are taken...only the full amount of the sale. The deputy gives you just enough time to run to the bank and return (if you show a letter of credit from your bank).
Also, if the original warranty deed listed a husband and wife but the foreclosure notices only showed the husbands name or visa versa, you better find out what happened to the spouse. Divorce, death, etc. If either, you need to start digging even deaper yet.
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Realtyfish
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Posted: 22:40 on 09-11-2003
Question for Mrs. Meltzer....What state does that rule apply to? To quote you, you said, "Judgements, State tax liens, Property tax liens, etc. none of those are wiped out. ONLY the junior mortgage is wiped out when the senior mortgage forecloses". Why does the junior mortgage get wiped out, especially if it hasn't been recorded at the recorder's office at the time of judgement?
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MrsMeltzer
297 Posts
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Roswell, GA
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Posted: 05:19 on 09-12-2003
I do not know how each state works.
In California and in Georgia, Junior Liens are wiped out (extinguished) at the foreclosure sale.
99.9999% of Junior Liens are recorded with the county. That is how their interest is protected in case the property is sold, or if they want to foreclose for non-payment.
I imagine that someone could have a Junior Lien that was signed before the foreclosure sale and then record it after the foreclosure sale. This would be similar to a "silent second" which is when a buyer gets a first mortgage and then records a second the very next day, knowing that the first mortgage would not be approved has they known about the second.
You posed a very interesting question. I have no idea what would happen if the second mortgage were recorded with the county after the foreclosure sale, as it has never happened to me.
No company would lend money as a second mortgage to someone in foreclosure without the stipulation of curing the first mortgage and taking it out of foreclosure. Therefore, it would have to be an older second mortgage by a private individual that just never got around to recording the mortgage. You would have to ask an attorney about that one.
Federal tax liens are NEVER wiped out at the foreclosure sale, regardless of state.
Hope This Helps,
Mrs. Meltzer
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Realtyfish
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Posted: 08:26 on 09-12-2003
Please allow me to re-phrase my queston Mrs. Meltzer  .....In Calif. and GA....A person knows he is being foreclosed upon and not for failure to repay the note but due to an infraction of the mortgage terms, such as due on sale clause if you try to sell on contract. Is it possible for that person to secure a second mortgage a day after the first mortgagee files a judgement against the person in question? Remember, judgement to foreclose, not actual foreclosure. My point being....If the first mortgagee is filing a judgement against the mortgagor, isn't it possible that the second mortgagee has no idea of the pending legal procedings (didn't read the notices)? Which brings me to my original point....If the First mortgagee is foreclosing, how does the second mortgagee become involved in being reimbursed if they have no knowledge of the pending sale? I live in Iowa and we are the only state that doesn't have title insurance. We are an abstract state, meaning, every stone is overturned right up to the closing. The agent working for the mortgage company that is closing a loan litteraly calls the recorders office moments before closing to determine if any last minute liens have been put into place. So I am curious in regards to other states procedures.
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Tedjr
572 Posts
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Austin, TX
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Posted: 08:43 on 09-12-2003
Liens where the owner has borrowed money and are inferior will be wiped out. Judgements and involuntary stuff will remain.
Ted Jr
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Realtyfish
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Posted: 08:57 on 09-12-2003
Ted, I wished I lived in that state. Jeez, if all a guy had to do was look at involuntary liens and judgements, this would be a cake walk. Thanks.
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Tedjr
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Austin, TX
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Posted: 17:03 on 09-12-2003
Liens where the owner has borrowed money and are inferior will be wiped out. Judgements and involuntary stuff will remain.
Ted Jr
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rayh78
188 Posts
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Hampton, VA
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Posted: 18:27 on 09-12-2003
So instead of a bank giving a second mortgage. They would be better off giving just a personal ****Must Reach Senior Investor status before posting URL's***hat way if the owners default they could go to court and get a judgement.
They would have better protection since this judgement can not be wiped out.
Does this sound right?
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