What liens will survive a foreclosure and auction?
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What liens will survive a foreclosure and auction?
I sold my house in another state and am looking to buy in CO; It was suggested that I buy a foreclosure an auction because I have cash. Then I heard talks about “super lien” etc. and some people saying that the buyer would assume some debts that were attached to the property. I had the impression before that all liens would be paid for by the proceeds of the auction and those later in the queue would be wiped out in case of insufficient funds. So what is the truth? In other words, do I have monetary obligation to anyone beyond my offer at the auction? Do I receive a clean title at the end?
Asked on October 27, 2010 under Real Estate Law, Colorado
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Do you mean the debts that are attached to the property that were incurred by the borrower? If there are multiple liens on a piece of property and the proceeds from the sale do not cover the liens then the liens will survive and the lien holder can go against the borrower for the money owed. There are "primary liens" such as a first mortgage and "subordinate liens" such as second mortgages. I have seen the term "super lien" as it relates to condominium properties and Condo associations. They are liens enacted by statute that give priority to all other liens except municipal liens. Massachusetts has such legislation. Check with an attorney in Colorado as to this type of legislation there and then do some due diligence when purchasing such as a title search. Good luck.
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