That really depends on the bid, and the relative positions of the liens.
Check the title and note the recording dates of the foreclosing loan and the car lien. If the foreclosing loan is first in time, then it will wipe off the car lien if the bidding will not cover both of them.
If the car lien is first and the foreclosing mortgage was recorded later, then the car lien is senior and will have to be paid at the auction. The opening bid would be the total of the foreclosing loan and everything senior to it.
Are Judgement Liens Wiped Out at Foreclosure? - Posted by Mike Childs
Posted by Mike Childs on October 20, 2004 at 19:43:38:
I am getting conflicting information. I am trying to purchase a home in South Carolina that is in foreclosure (Sale date Dec 3, 2004). I have made an offer for loan balance and it has been accepted (by the owner and the bank); however, during the title search we discovered a lien from a default jufgement on the property.
The lien is for a reposessed car and is in the amount of $12,100. I contacted the finance company and they tell me the lien is now $20,000 + due to accrrued interest. They are not interested in negotiating a reduced price and maintain thet the lien will remain attached to the property after foreclosure whether the bank takes it back or someone else purchases it at the foreclosure auction.
I have been advised by other investors that foreclosure will clear the lien from the property and the lienholder will usually settle for a much reduced price to avoid being wiped out at foreclosure.
Will the foreclosure remove the lien from the property?
– I have made an offer for loan balance and it has been accepted (by the owner and the bank) –
If you made an offer and it has been accepted, then there won’t be any foreclosure sale. Why would you need the bank to be involved in the offer? You should be able to get your deposit back though, since the seller cannot deliver clear title.
Re: Are Judgement Liens Wiped Out at Foreclosure? - Posted by gerard
Posted by gerard on December 03, 2004 at 09:18:01:
the house is going into forclosure,how do i find out if there are any judgement liens on the property,and if so the bidding price at the auction does that wipe out the liens on the property?i have different answers.
Re: Are Judgement Liens Wiped Out at Foreclosure? - Posted by Mike Childs
Posted by Mike Childs on October 24, 2004 at 18:30:05:
We can’t get a clear title with the lien attached to the poperty so the deal is off. The lien holder will not negotiate a lower price so the home will go to foreclosure. If we buy it at the auction will the judgement lien stay attached to the property?