Foreclosure auction?
Question:
you need to do as much investigation about the property as possible. A title search may not be possible before the auction, however keep in mind that what ever tax liens, or mechanics liens are attached to the property...you inherit!
Do your own due diligence prior to auction. Check the county records or ask the bank if they are aware of any other liens.
Not being sure of your state, I will have to qualify my answer.
However, in most states, the foreclosure clears all subordinate liens. It is unlikely that a subordinate lien will foreclose on the property as the primary lien holder will then call the loan and the subordinate lien holder could lose the property to another foreclosure.
Usually what happens, is that all lien holders are notified that a foreclosure is in process. On the day of the auction each will enter a bid to cover their liens.
Primary may bid $50,000 because that is what is due them. Number 2 lien holder may bid $60,000, because they are owed an additional $10,000. Number 3 lien holder may bid $70,000 as that is what is due them.
It is possible that subordinate lien holders may not even show up. Often these lien holders are window and siding companies that over charged for their work to begin with, and they are writing their losses off.
Good Luck
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