It all depends. I have purchased properties at the auction with high federal tax liens, a second mortgage, ect and all liens were released. I do know of a case in Fairfield where the second lien holder refused to release the lien. THe buyers were not happy and lost their deposit. Depending upon the county, water/sewer will most likely go with the property, but usually not electric or gas. Please have your financing in place. I have seen too many people loose their deposit over their lender not financing these transactions due to no purchase contract or legally being able to do an appraisal or not meeting the deadline. Cash or a line of credit is ideal in these transactions.

I agree with Keith's last post. When in doubt, retain an attorney & keep the attorney to an agreed purpose only (in writing) to controll his or her fees. But if you elect not to do so, you can obtain further information about the foreclosure proceedings at the Franklin County Clerk of Court's Office. You can look at the foreclosure file, which will give you more info than you have now.

Make sure you know which mortgage is being foreclosed with the bank. It does not make a difference if they own both mortgages. Different departments will be doing the work. If the second mortgage is foreclosing, you have the same situation as if it was separate lenders. The hoa may be a small amount, but depending the laws in your state they can even foreclose out the mortgage in certain states. Be very careful and it is always best to get some one in your corner. You might know everything you need to know but it is difficult to identify everything in a blog and much easier for an expert to review your specific case.


Keith manson
First Weber Group
Certified Distressed Property Expert
Greenfield,Wisconsin

Thanks for the help, Keith. I have inspected the property and the previous owners no longer occupy the residence and are locked out and I have a very good idea of the condition of the interior and exterior. I did a title search and discovered the first and second mortgages through the same lender and found no tax liens applied to the deed.

I have heard the same horror stories of the first mortgage lien holder foreclosing and a second different bank owning the second mortgage and refusing to release the obligation from the home. If the first and second are with the same bank and they wish to foreclose, doesn't that apply to both mortgages?

If the homeowner's association dues have been unpaid for the entire length of time, it is only a couple hundred bucks (same as utility balances). Just wanted to know if there is anything else I should consider before bidding that would substantially make a difference to this investment.

You better get someone to help you! You need to have the title checked and ensure when your bidding on the foreclosure you know what your buying. Also you want to know if the property is occupied or if you buy it will you have to evict the owner? If the association has outstanding fees where are they in the foreclosure process? What condition is the home in and are you willing to take on the risk?

I know people that went with out assistance to a foreclosure sale and bought the property (they thought) but the purchased the second mortgage and the first was still valid, so they purchased the property subject to the first. They lost their investment! Also you may create some credit issues if you pruchase the second mortgage because now you are the owner of the property suject to the first!

Talk to someone that understand this process in your area and talk to an attorney.


Keith Manson
First Weber Group
Certified Distressed Property Expert
Greenfield,Wisconsin