All Forum Posts by: Peter Matus

From my understanding, most states foreclosure sale is subject to any and all superior liens and wipes out any all junior liens. Tax liens from the IRS or State and Local government always take the high priority position. The first mortgage is higher than the second, and HOA liens are usually lower than mortgages.

Here are some other things I have learned that may help you regarding Foreclosure sales. 

1) Since Tax liens are superior to all other liens, assessments, charges, etc., tax foreclosures generally wipes out all liens on the property. 

2) The Notice of Foreclosure Sale is required to be publicly posted and published. In Judicial foreclosures (mortgage), it will state something along the lines of "Under and by virtue of the power of sale contained in a certain Deed of Trust." It it is a lien foreclosure it will not state that.

3) Not sure if this applies to your county, but in mine this is a BIG ONE: If the Notice of Foreclosure Sale states "This sale is made subject to all prior liens, unpaid taxes, any unpaid land transfer taxes, special assessments, easements, rights of way, deeds of release, and any other encumbrances or exceptions of record". (emphasis added). Any other encumbrances or exceptions of record means ANY other liens - including junior liens. You want it to state "Prior" instead of "Any"

As Chad mentioned it depends on which lien holder is foreclosing. If it's the first lien holder then all subordinate lien holders get wiped out at the sale. There are exceptions, however. If there's any kind of local, state or Federal tax lien on the property then there could be redemption periods that could jam you up. In some states if ALL creditors are not named in the Lis Pendens then they could cause problems for you as well after the sale. To minimize your risk get a title report on the property to make sure the foreclosing lender is in first lien position and there are no skeletons in the closet that could come back to haunt you.

No you don't 'buy all the attached liens to the house".  It depends on who is foreclosing.  Don't post false info if you aren't familiar with the process. 

There are many variables on a Foreclosure, 

When you buy the house at court you are also buying all the attache liens to the house. 

If you are new to investing look for local groups, local investors that are already doing it.  Many will charge for the services they perform but will be worth it. 

A mistake when you pay full cash at the court ... could be expensive.