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Updated almost 3 years ago, 03/11/2022

User Stats

29
Posts
7
Votes
William K.
  • Investor
  • Greer, SC
7
Votes |
29
Posts

Very peppered lien History. What winner has to paid for?

William K.
  • Investor
  • Greer, SC
Posted

I was at an auction recently, and a property I was interested in had a pretty peppered lien history.  Here goes the my best description of the situation:

First, I did a lien search by myself and found it to be very complicated.  The property ownership dated back to the 70s and there was a lot of borrowing against it.  I decided I would buy a title search.  However, my title search request was very late in the process, and I was concerned it would not be done in time.  I continued to search on my own.  What I found was there were 2 liens on the property.  The 1st was for 100k and the 2nd was for 32k.  The Foreclosure was on the 2nd.  At this point I put the property in the do not bid on category.  FYI, the paid title search didn't come in on time.

At the Auction:
When the property came up to be auction a question was put to the judge.  "This lien appears to be in second position.  How does it fit in with control to the property"?  The judge responded, "This does have a senior encumbrance against the property, but the foreclosed lien (2nd) will have control.  From there everyone started bidding like there was nothing wrong with it. I did bid, but it went higher than my max bid, which was around 152k.

After the Auction:

When I got out of the auction I checked my phone, and notice my title search was done (lol).  In reviewing it I found there were also 3 judgements against the owners that I didn't find.  This is how they were listed.

1. owes to a bank 8k

2. owes to a bank 3k

3. foreclosure. the home at the auction

At this point I'm not sure if my bidding was a mistake, or if I should have bid higher, because the following questions came to my mind:

1.  Does the winner have to pay for the 2 judgments?

2.  Does the winner have to pay for the 1 lien.  the loan for 100k

3. Does the proceeds from the auction, the 152k, pay just on the foreclosed lien (2nd), or does it pay 2nd, then the 1st, then the judgement?

This is the end of my story.  I would really appreciate any explanations of this situation.

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