1st Position Foreclosure

[Thomas Watson]

What happens when you own a first position note that has an unpaid balance of 9K and there is a 2nd position for 40k and 3rd for 80K? Is the 1st position considered the senior lien if you file foreclosure? The home is worth 180K. What happens if the 2nd or 3rd file foreclosure first?

[Dion DePaoli]

A junior lien can only foreclose those interests in title which are subordinate to its lien.  Priority is set by first in line to record.  Some liens have super status which means they always have priority no matter when the lien comes forward.  Like property tax liens.  

As a Senior holder you could join the foreclosure but do not have to.  If you join then essentially the Subordinate lien and you would foreclose out Subordinate interests and each your own lien would be extinguished.  Might be a play in this scenario.  

As Bob mentions, the lien holder is only entitled to the principal, interest and any fees or advances made after the sale is net from proceeds.  All overages are applied to interested parties according to their interest's priority.  

As Ned mentions if one of the juniors file it would be in their interest to have you either join or simply buy your lien from you and place what they pay in their payoff.  

It might make for an interesting story if the OP can explain the origins of the liens and their priority here.  How did you get a $9k lien and why when the other two liens came into origination did they not demand you to be paid off?