Foreclosure in Jacksonville>Question Details

cmitchell,  in Jacksonville, FL

What happens to a HUD second mortgage when a property is sold in a foreclosure auction?

Asked by cmitchell, Jacksonville, FL Mon Oct 29, 2012

Help the community by answering this question:


All liens behind the foreclosing lien get wiped out in a foreclosure. If the HUD 2nd was behind the foreclosing entity, it's gone. They are referred to as a sold out junior lienholder.
0 votes Thank Flag Link Fri Apr 4, 2014
How can a home be sold when it did, not even go into pro-bate!! Home was lost after mother passed away had living trust and will!!
0 votes Thank Flag Link Thu Jan 24, 2013
Probate, trusts and wills have nothing to do with this. Sadly, many people think somehow that probate will impact the lender's ability to foreclose. It doesn't. If the loan is delinquent or in default for other reasons, the lender has the right to foreclose. Also, typically, the death of the borrower is a default event and the note can be accelerated for that reason alone. Fortunatley, the CFPB has enacted news rules effective January 10, 2014 requiring lenders to review and consider any legitimate successor's in interest before proceeding with foreclosure. The rules are pretty strict.
Flag Fri Apr 4, 2014
This is a seperate question that will get more attention in it's own thread. Can you provide more information? You say it was sold, lost, etc. Was an attorney involved with the estate?
Flag Thu Jan 24, 2013
Can some one answer this question!
Flag Thu Jan 24, 2013
Any liens on the property are negotiated BEFORE closing. Title can not transfer without clearing up claims. That can include second mortgage, HOA fees, contracter liens, outstanding permits, etc.

It is also up to the negotiater to get the very best deal for you as to being totally released from the property with no further obligations which is always the goal!

Debra B Albert, PA
Keller Williams REalty
Port St. Lucie, FL
0 votes Thank Flag Link Tue Oct 30, 2012
The former owner passed away apx 18 months ago. The bank that auctioned the property had a 1st and 2nd mortgage on the property, but the 2nd mortgage was funded by HUD (I think). Also, HUD was listed as a defendent on the foreclosure documents. I am scheduled to go to the courthouse later this week to get the certificate of title. I am trying to determine if I need to get an attorney involved prior to having the certificate of title issued. I am trying to avoid any additional expense. I am already out of pocket apx $1500 and I still don't know if the foreclosure will go through. Any suggestions?
Flag Tue Oct 30, 2012
Since Florida is a recourse state the borrower would normally be responsible for any shortfall after the property is sold however it's always a good idea to check with an attorney.

Orin Smith
Broker Associate
All Real Estate Pro
6672 Banbury Road
Jacksonville, FL 32211
Phone office: 904-743-3050
Cell: 904-728-3729
Fax: 904-517-8116
0 votes Thank Flag Link Mon Oct 29, 2012
It depends on the second loan. Many will have a Promissory note attached which means you could owe the money even after the foreclosure. To know for certain, review your documents and consider getting a legal opinion.
0 votes Thank Flag Link Mon Oct 29, 2012
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