Legal Question in Real Estate Law in New York

Re: Forclosure

Assuming the contractor filed his lien after the first two mortgages and judgment were filed, the contractor, if he were to succeed with the foreclosure, would own the property subject to the other liens. In other words, the property could subsequently be foreclosed on by the other creditors if they are not paid. However, you may have valid defenses to the mechanics lien and should consult with an attorney. Time is of the essence, however,as many possible defenses may be waived if you do not act quickly.

Note: This response is given for informational purposes only. No attorney/client relationship has been created.

Re: Forclosure

I believe that Mr. Drucker's resonse is inaccurate. A property sold through foreclosure is sold free and clear. The foreclosure proceeds are distributed according to lien priority, and any shortfall can be held as a deficiency judgment against the debtor personally. Generally, liens have priority according to the order in which they were created and noticed; judgment liens are created (and noticed) when the judgment is docketed in the county where the debtor's property is located. However, mechanics liens have different priority characteristics than mortgages or judgment liens. The bottom line for you is that some of the liens will be paid off and the balance can be held against the debtor personally. Moreover, the unsatisfied judgments can become liens against property acquired by the debtor later on. Feel free to call me at 212-367-9167. I do not charge a fee for the intial consultation.

Re: Forclosure

Lien foreclosure sale forces the banks to bid their mortgage balances, to protect their status. Any excess bid proceeds goes to pay the lien. Other creditors get nothing, but their judgments and liens remain. You lose house, banks get paid and other judgments remain outstanding against you/your husband.