Question: I am the third lien holder of a house. The second holder is foreclosing on the house. will I be able to get what is owed me after foreclosure sale?
Answer: -Based on Lien Priority those senior to you always get paid first. So in order for you to get paid, the bid amount must be enough to pay off any senior lien holders. Once they are paid off, you will be next in line to get paid. So it really depends on the bid amount whether you’ll get paid or not.
Hi,
I’m in the Chicago suburbs area and I’ve got 2 questions. I’m thinking about putting an offer on a house that’s in pre-foreclosure and the owner is trying to sell. I’d like to know:
1. If I put an offer to buy the house with a closing date after the date of the sheriff’s sale auction, does the seller have the ability to somehow get the sheriff’s sale postponed by saying that he has a contract agreement to sell the house and pay off the liens on it?
2. If I decided to wait and try to buy this house at sheriffs sale, knowing that the house has 2 mortgages, would I have to pay off the 2nd mortgage if the bidding ends with the first lender paid off? As I understand it, usually the opening bid will be the amount owed to the primary lender and if that lender wins the auction he can nullify all the other liens and mortgages on the house. Does the same work if I out-bid the primary lender and got the house, or would I still have to go and the pay off the 2nd mortgage on the house afterward?
Thanks.
1. The seller cannot postpone the auction even if they have a purchase agreement unless they file bankruptcy. Bankruptcy will postpone the auction. The lender who is foreclosing can also postpone the auction if the homeowner can come up with funds to make their account current. You need to call them and let them know you want to buy the property and provide evidence of such. They can postpone the auction even if it’s only a day away.
2. Whoever is foreclosing on the property, whether it is the 1st, 2nd, 3rd, etc, anyone junior to them is wiped out if no one bids past the opening bid. So if you bid $1 over the opening bid and the 1st was foreclosing, all the others will be wiped out and you owe nothing to them. Those that were wiped out have the option to go after the owners for anything that was deficient. (Deficiency Judgment)