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Updated almost 5 years ago,

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1,761
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Eric M.
  • Flipper/Rehabber
  • Louisville, KY
1,299
Votes |
1,761
Posts

Would appreciate attorney opinion...mortgage modifications/liens

Eric M.
  • Flipper/Rehabber
  • Louisville, KY
Posted

Long story short. This is for the purposes of a foreclosure auction. 200K original first mortgage. in 2013, modification recorded indicating that principal was being reduced from 170 to 130K and a HUD partial claim was being added for 52K.

No additional recording of lien or anything by HUD but my understanding is just this clause in the modification creates a new lien of 52K on the house. So now basically a 130K lien and a 52K lien.

Now jump to 2019. First mortgage lender forecloses and goes to auction. Is the HUD partial lien considered a second mortgage (wiped out by FC) or is it somehow still part of the first mortgage and must be paid by auction buyer?

Thanks

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