Foreclosure in Bucks County>Question Details

Lorimaria, Other/Just Looking in Bucks County, PA

I have a judgment/lien on a property in bucks county that is now in foreclosure and up for sheriff sale.

Asked by Lorimaria, Bucks County, PA Tue Feb 3, 2009

Will my lien have to be paid for a clear title? what happens if it doesn't sell at the sheriff sale? Does it go back to the bank and if so will my judgement/lien still have to be paid before clear title?

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Thanks for all the information and apparently you are all right on different levels. After reading your answers and talking directly to the bank it seems that the judgement I have on the property, in the form of a lien, will basically be null and void. Since the judgement/lien came AFTER the property was purchased by the person I have the judgement against neither the sheriff's sale or an actual foreclosure with property going back to the bank will fulfill the judgement. It will be dismissed, but the actual court-ordered judgement will stay registered with the courts until I find another venue with which to register the judgement against this person.
Seems you can't win in this situation and the only way the judgement/lien would have been satisfied is if it had sold as "regular" property, not in distress. UGGGG! Thanks again. Lorimaria
0 votes Thank Flag Link Wed Feb 4, 2009
Lorimaria: As I understand it, liens are paid in a pecking order. First is the TAXman. You could have guessed that one. Then comes the primary lien, usually the mortgage, unless there was an earlier lien that the Mortgage Company accepted or overlooked (Hey, it happens!) Then come the other liens. Obviously, the major dollar amount will be the mortgage, in most cases. The Mortgage Company will bid at sheriff's sale up to the amount that they are owed, just to keep the property from going to someone else for less than the property is worth, clearing their lien by, in essence, paying themselves a percentage of what's owed or obtainable in a later sale.

This leaves you in a poor position. If the mortgage company pays only the amount that they are owed, you, being a subordinate lien holder, will get nothing! As far as I know, only the tax liens do not go away in sheriff's sales. and the sheriff's title after that sale IS a clear title.

I'm sorry but I believe that the only time a secondary lien works is in the case of a regular sale, where the owner must compensate all liens before passing title. That's what title searches and title insurance do: protect the new owner from any undiscovered and unpaid liens. That doesn't happen in a sheriff's sale. It’s not needed.

Sorry.
0 votes Thank Flag Link Wed Feb 4, 2009
Lorimaria,

The are many scenarios for how foreclosed properties play out. I'd be happy to discuss it with you indepth at your convenience. Just give me a call. But here are the basics.

1. The title does have to be clear for the property to transfer.
The sheriff sale will basically remove any liens from the property for the next owner.

2. Depending on how much principle is left on your loan, the bank will have a representative (lawyer)
at the sheriff sale. They will set the minimum purchase price by making the initial bid. (Priniciple amount).

3. If someone else buys the property, they get the house, the bank gets paid, and the sheriff fees are paid.

4. If the bank ends up buying it back, they will then put it on the market.

5. Unless the sale proceeds satisfies all liens, you can still be on the hook for any shortfall.

If I can be of any further service, feel free to call.

Charles Allan Dick, Realtor
Keller Williams Real Estate
Cell: (215) 421-9826
Email: CharlesDick@KW.com
Web Reference: http://www.CharlesDick.com
0 votes Thank Flag Link Wed Feb 4, 2009
Not necessarily. The first one paid is the Tax Man (federal, state, and local), next is the first mortgage holder (the second one may or may not be paid), then comes everyone else. If it is being auctioned by the sheriff "on the courtroom steps," that leads me to believe the owners have defaulted on their taxes. Try contacting the auction company to see how they plan to clear the title. Get the name of the title company and ask them where you are in line. Consult with an attorney to determine what recourse you have, if any, and how best to proceed.
0 votes Thank Flag Link Wed Feb 4, 2009
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