All Forum Posts by: Doug Kolt

Tom, thank you for the information. What you described is exactly what the documents from the title search indicate. There was a lien against the property from the IRS years back however that lien was released shortly after. I appreciate you taking the time to reply. 

Doug

You and me both Bob. I'm new to this and have been researching this dilemma for weeks. You and Caroline are right though, title insurance and consult an attorney. I've joked with friends that when the auction starts and nobody bids on it, my question will be answered. Buyer beware! Thank You Bob. I appreciate your time.

Doug

Bob, The suggestion is that if the senior lienholder files the foreclosure then then all junior liens are extinguished, typically. "USA" is listed as a defendant in the party details, which is in reference to HUD. However, "suggestions or assumptions" do me no good whether they come from a title agency or a bank etc. Especially when the amount of the Junior Lien could potentially be 30-50% of the purchase price.

Thank You for your reply Caroline. The HUD loan was taken in 2016 and then immediately applied to the outstanding balance of the primary mortgage.

Hello Everyone! I'm looking at a property coming up soon for Sheriff's sale. The primary lender has foreclosed on the property and initiated the Sheriff's sale. Through a title search I found the previous (current?) owner took out a Partial Claim Mortgage through HUD in the amount $38,741 to be paid back once the primary mortgage is paid off. Both mortgages are in the previous owners name. I have called the primary lender, the main HUD office, the local HUD office, the Sheriff's department and auction website to find out if this loan is forgiven through the foreclosure or if the winning bidder will assume this loan and be expected to pay it. Each entity referred to one of the other entities. Nobody could give me an answer, HUD didn't even answer the phone. I don't want to bid on this property if I will have to assume this loan since it will eat the majority of any potential profits. Has anyone gone through this before? Anyone familiar with the situation? I appreciate any feedback you guys have. Thanks in advance!