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
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. Itâ€™s not needed.
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