Who will pay off leins put on title during foreclosure so lender has clear title?
Question:
The liens will be placed on you, in a legal action by the person funds are owed to, or assigned to you during the foreclosure. Or upon sale of the house those liens and all the rest remaining on the law will be put in judgment against you, and you will be responsible for that amount.
At the sheriff sale, all of the liens are wiped off of the property and ownership is transferred to the purchaser at the auction.
The liens are paid off in the order of property taxes first, then the first mortgage, then every other lien in the order in which it was filed. If there is only money to pay the taxes and the first mortgage, the other liens are wiped off of the title but receive nothing.
That is why second mortgages and other liens often have higher interest rates than the first mortgage: because, in the event of a foreclosure, their interest in the property is quite a bit less than the first mortgage.
Hope that helps.
ForeclosureFish
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