Foreclosure in Staten Island>Question Details

Alberto, Other/Just Looking in Staten Island, NY

Question on Liens/Forclosures

Asked by Alberto, Staten Island, NY Wed Mar 11, 2009

If buying I were interested in buying a house via a Short Sale, a Pre-Forclusure, Auction, or REO are you responsible for any outstanding liens, like unpaid home equity loans?

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When you purchase a pre-foreclousre you are responsible for obtaining clear title or the property will be subject to the existing encumbrances. That is why with a short sale you have to have the 2nd mortgage holder agree to a substantial reduction in principle. When you purchase a property at the the foreclosure sale at the steps you also have to be very careful. Very often the auction will be for a lien that is not in priority, so you are actually purchasing the position of the lien and you are still subject to the existing priority lien.

My suggestion would be, if you are seriously interested in acquiring property through these methods, to hire an attorney for an hour of their time and pick their brain. It will well be worth the money you pay to strengthen your knowledge. People make extremely ugly mistakes in this business. Best of luck.

Very truly yours,

Douglas Montgomery, Broker/Owner
Home NY Corp.
0 votes Thank Flag Link Wed Mar 11, 2009
Any property being purchased pre-foreclosure: Check title for all liens and consult an attorney about what you will be responsible for. Many jurisdicitons are different.

An REO property has already been foreclosed and the lender has taken ownership so you will receive clear title, free of any liens.
0 votes Thank Flag Link Wed Mar 11, 2009
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