Legal Question in Real Estate Law in Texas

Real Estate Law

I am looking into a property that is on foreclosure auction. My title search reveals that it has 2 loans (probably 75/25) originated from Bear Sterns. The 1st loan referred as 1st Lien Note (75%) is 148,900 and the 2nd Loan referred as 2nd Lien Note (25%) is 49,650. Both are of even date and payable to the same bank.

In the deed following is said about the 2nd 25% Lien : �The 2nd Lien is secured by the 2nd and inferior vendor�s lien against, and superior title to the property. The Lender agrees that the 2nd and inferior Vendor�s Lien against, and superior title to the property are and will remain subordinate and inferior to all liens securing the 1st Lien Note, regardless of the frequency, or manner of renewal, extension or alteration of the 1st Lien Note or the Liens securing it�.

The Auction is based upon First 75% Lien.. Say if I get the property, do I have to deal with/pay the 2nd Lien Note of 49,650 later on?!

I will appreciate your help in this regard.

Thanks.

MR


Asked on 10/05/08, 3:24 pm

1 Answer from Attorneys
Cheryl Rivera Smith The Smith Law Firm

Re: Real Estate Law

Second and inverior liens gets wiped out by the foreclosure of a prior lien, but watch out for tax liens, probate, contractual claims that might not show up on the title search. Good luck.

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Answered on 10/06/08, 9:38 am


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