If our property is being auctioned off, do all liens on the property have to be satisfied at the sale?
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If our property is being auctioned off, do all liens on the property have to be satisfied at the sale?
Will they remain or follow the homeowner?
Asked on August 10, 2011 Virginia
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If your real property is being foreclosed upon by the person or entity holding the first mortgage (trust deed), junior liens (mortgages or other liens recorded after the first mortgage) will be wiped out if the people holding them do not cure the arrears on the first mortgage in the event of a trustee's sale.
Even though the junior liens may be wiped out by a senior lien at a trustee's sale, you as the homeowner may still be obligated for any junior loans or judgments recorded on your property that was lost in a foreclosure.
Since I do not know what type of junior liens are on your property (assuming there are some) I cannot be more specific with my answer.
Assuming the first mortgage or trust deed securing a loan with your property is the lien on the property being foreclosed upon, if the loan that the first mortgage securing your property was for the purchase of your home, then your state's laws may prevent a deficiency judgment owed by you if the home is sold at foreclosure for less than what is owed on the loan.
You should consult a real estate attorney if your home is in foreclosure concerning further specifics regarding your question.
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