jr/sr lien, 1st post/2nd position?? pls explain
Can someone please explain the differences between these terms (jr/sr liens, 1st/2nd positon) and what happens to each when a property is purchased at foreclosure? Are they cleared at foreclosure? As the pourchaser would you still be responsible? Any recommended reading on this topic?
Thanks!
lien positions are created by recording date. a lien which is recorded after another is considered to be jr. to that lien.
In most states at foreclosure sale purchaser obtains title subject to any sr. liens. (i.e. 2nd forecloses, 1st stills remains), and jr. lienors have a right of redemption in which they can pay off any senior lien holders who also have redeemed or they will fall off title.
if you post the state you are working in, I can e-mail you some more specific information.
tlsargent,
I'll offer to clarify the jr./sr. and 1st/2nd position foreclosure information for you. When you buy a property, then you usually need to get a mortgage. The 1st mortgage you get on your home to purchase it is called the senior leinholder or is in the 1st position. Then you start getting letters in the mail for a HELOC (Home Equity Line of Credit), Home Equity Loan, Second Mortgage, etc. If you get a second mortgage on top of the first mortgage, then it is called a junior leinholder and considered in the 2nd position. Any loans you get after the 1st mortgage is considered a junior leinholder. The position is when the loan was obtained.
If you are purchasing at the foreclosure auction, then the leinholder that is foreclosing makes a big difference. If a junior leinholder (2nd/3rd/4th, etc.) is foreclosing on the property, then you may inherit the leins underneath it. If the 1st leinholder is foreclosing, then the juniors leins will be wiped out at the auction depending on the highest bid and how your county does the auctions.
You should contact your county courthouse and find out the rules of the foreclosure auction. You might also want to attend an auction and ask the investors who are bidding how the auction works. They may be helpful and give you some information.
Tanya
Located in Idaho...thanks