who qualifies to pay off 1st note in the foreclosure

[Yana Sha]

I am a first lien holder on the property and I am about to foreclose . I have an interested party who is claiming to be the 2nd lien holder and they have lis pendens , open lawsuit without a judgement and unrecorded deed of trust to the property as of now. Since the lawsuit is not completed and the deed of trust they are sending me is not recorded I suspect that this is just a ploy to postpone my sale.  Do they have any rights to request pay off amount and pay off my loan? My foreclosure company is pushing me to give them the numbers but I don't know enough about it to move forward. Please advice

[Mike Hartzog]

An unrecorded DOT is valid in most states. I would check to ensure it is properly notarized, references the correct legal description, etc. They should really get it recorded as it may be difficult for them to recover any overage if someone bids more than your payoff amount at the sale. That said, I would not let it hold up your foreclosure process. If they provide a payoff, you can always stop the process anytime prior to the foreclosure sale.