What if there are 2nd mortgages and other liens on Foreclosure?

[Elena Pech]

Hi, I found a very attractive property in a nice neighborhood that will be sold on Foreclosure Auction. 

What do I need to check or to be concerned of from financial perspective? I checked bills and taxes.

What about the title? What if there are other mortgages and liens on this house? Who is responsible for it? Logically person in default should be responsible for all other debts, but I want to clarify.

What other financial tricks can be involved?

[Ron S.]

You could waste your sanity, time, and money having an attorney file a quiet title action to something you have no standing to file but, the easier and cheaper (and more fruitful) route would be to get a title report to show all of the liens on title, and then match the foreclosing entity up with their priority on title. If the foreclosing entity is in first lien position, all other liens behind the foreclosing entity will be wiped out in foreclosure, absent very few and very specific exceptions (IRS, HOA, some utility liens, etc.). Even the IRS priority lien will sunset after a short period of time.

You can even have an attorney (A competent and capable one) to confirm that you've done the right research and have drawn the right conclusion. Once confirmed, go get your cash ready and plan to show up on the courthouse steps and buy the property of your dreams (Assuming no one outbids you).