Legal Question in Credit and Debt Law in New York

Re: Foreclosure

they are named as a defendant because their judgment is a later filed lien on the property in question. If the bank is foreclosing their lien (created when the mortgage was obtained) they have to give notice to all the later filed liens. These later filed lienholders normally file an answer that indicates they have no position on the matter other than to be notified should the sale of the house result in a surplus of funds (after the mortgage is paid off)...Then they would start a proceeding to have the surplus funds distributed to the next lienholder and the next until the surplus funds are exhausted. If the sale of the house results in a deficiency (not enough $$ to pay off the first mortgage) they would want to know that as well so they close their file on that proceeding. Of course, the judgment that created that lien remains in effect for 20 years...