Will the price paid at a foreclosure auction settle all claims against said property

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Will the price paid at a foreclosure auction settle all claims against said property

I am interested a foreclosure property. In the complaint there are 4 additional persons with claims/interest against the property, the HOA most likely for non-payment of HOA dues, some waste management company and 2 other banks and are listed as junior. It states they may or may not have claims. Don’t they either do or do not? How can I figure was is totally owed and what my cost will be? Will the price paid at auction settle all claims?

Asked on November 30, 2016 under Real Estate Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, the price paid at auction will NOT settle other persons' or parties' claims: the foreclosing lender cannot compromise, dismiss, eliminate, settle, etc. other parties' claims without their consent, and they will not consent unless they are paid. So unless the bank is taking their money and giving some or all away to the other potential claimants and getting signed settlements from them--which you can assume is not happening--other claims may and likely do exist.
They have to file their claims before their respective statutues of limitation run out, but not any time before then--other parties can wait to file. Therefore, there is no way, until years have gone by, to know for sure whether they will or will not file.
Based on what you write, you could be exposing yourself to considerable other claims if you buy this property.


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