Purchasing a foreclosure on the courthouse steps

[Carolyn Abbott]

I am getting ready to purchase a home at the courthouse steps. If there is a first and second lien on the home and I win the bid for the first lien what happens to the second lien?  Do I have to  consider it when bidding because I have to pay it off also?

[Chad U.]

It depends on what the 2nd lien is. The 1st must notify and name any junior liens in the foreclosure action judgement. If it is an HOA, or back taxes then they may survive.

As for other liens that survive, these can be:

• IRS-under special circumstances (under 120 day redemption period from deed recording). If IRS does not exercise its redemption right within the 120 days it will automatically expire.
• Department of Treasury with usc exception
• State Tax Lien
• Lien by USA or Dept of Justice
• US Department of State
• Other Federal Agencies
• Code Enforcement for debris removal or mowing
• Demolition or Environmental Based Liens
• State child support lien
• Board of County Commissioners for special assessments
• Utility Liens
• Water/Sewer Delinquency (only in selected states)
• County (and/or School/Township) for unpaid taxes

@Steve Babiak has also graciously compiled a list of forum posts related to courthouse auction sales below:  

http://www.biggerpockets.com/forums/41/topics/6897...