Legal Question in Real Estate Law in California
Trust Deeds residencial property (foreclosure)
If the 2nd lien on a property forecloses the property and sends it to auction, will the senior lien still be in effect? Will the winning bidder have to pay for the bid amount, plus the 1st lien? What would the title report reflect?
2 Answers from Attorneys
Re: Trust Deeds residencial property (foreclosure)
Whoever bought the property at the foreclosure sale would take title subject to the lien created by the first trust deed. The buyer would be wise to either refinance the property or to negotiate an acceptable arrangement with the first trust deed holder.
Re: Trust Deeds residencial property (foreclosure)
Whoever purchases at the trustee's sale, or "auction" as you call it, takes subject to any senior liens that exist. That means if you bought at a foreclosure sale of a second lien, the first still exists and if you do not pay the payments on it (and they are probably behind and late charges accumulating) then the first will conduct its own foreclsoure and "wipe out" your title. P.S.: it is spelled "residential"
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