Legal Question in Real Estate Law in California

If the foreclosure was of a first deed of trust, meaning the deed of trust most senior, then all liens of subsequent deeds of trust were wiped out and do not follow the foreclosure sale. California law provides for mortgages, but no one in the state uses them anymore.

Tax liens do not get wiped out by a foreclosure.

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To amplify upon Mr. Roach's answer a bit. First, as to "mortgages." While true mortgages, as used in other states, are rarely used in California, we often use the term "mortgage" to refer to a home loan that is actually a promissory note secured by a deed of trust. A note secured by a deed of trust is by far the commonest method of financing residential purchases in California. Next, your question asks about "IRS property tax liens." I think this may be a concatenation of two concepts ..... an IRS lien and a property tax lien. The IRS does not collect property taxes and hence there is no such thing as an IRS property tax lien.

Let me try to simplify the previous answers. First off, Selik's broad answer is simply wrong. Tax liens, senior debt, and some other kinds of senior encumbrances survive foreclosures. Second, although Whipple is technically correct that the IRS would never have a property tax lien, that is irrelevant, since the IRS DOES place income and other tax liens on properties. It makes no difference to your question what the tax is for. Lastly, it makes no difference if we are talking a mortgage or deed of trust.

Now having gotten rid of what doesn't matter, here's what does.

First, tax liens survive foreclosure. They never go stale. Doesn't matter how old they are. Doesn't matter if it's the IRS, the FTB, the County Assessor, or the Dog Catcher's special assessment. So every subsequent owner is encumbered by them until they are paid off.

Mortgage liens, Deeds of Trust, judgment liens, and pretty much any other private lien survives or is wiped out based on order of recording. For there to be a foreclosure, the lien that is foreclosed must have been recorded at some time in the past. Other liens may be recorded before or after. So suppose Joe Homeowner takes out a loan to buy his house, secured by a deed of trust (what most people call a mortgage). Five years later he takes out a home equity line of credit and does a major remodel. Five years after that, he and his business partner have a falling out, his partner sues him and gets a judgment. Partner's lawyer records an abstract of judgment, also known as a judgement lien. Then we have a foreclosure, but on which lien?

If the foreclosure is on the judgment lien, the buyer at the foreclosure sale gets the property subject to both the original loan and the HELOC lien. If the foreclosure is on the original purchase loan, the two later liens are wiped out and the buyer at the foreclosure gets title clear of any liens except tax liens if any. As you may by now have guessed, if it is the HELOC lender who forecloses, the buyer at the auction gets the property clear of the judgment lien, but subject to the original purchase loan.

So, the only way you can tell what liens the new owner would be responsible for, is to find out if they are tax liens or private liens, and when the private lien was recorded relative to the lien being foreclosed on. One other thing you should know about old liens - if they secured a loan, the statute of limitations is 4 years, BUT the power of sale under a mortgage or deed of trust NEVER expires. The statute of limitations only applies to court actions. The lender could still foreclose on any lien that survived the foreclosure.