If you put a lien on someone's house what happens if the house goes into foreclosure?

Answer 1

Liens get paid off in the order the lien is recorded, except for Government liens. For example: house sells for $100,000.00 at a foreclosure auction. There is a $80,000.00 first mortgage, $5,000.00 in back taxes, $3,000.00 in nusance abatement fees and a $35,000.00 second mortgage and a $6,000.00 third mortgage. The $5,000.00 in back taxes gets paid. The $3,000.00 in nusance abatement fees gets paid. The first mortage holder gets $80,000.00. The second mortage holder gets $12,000.00 of their $35,000.00 second mortgage. And the third mortgage holder gets nothing. The third mortgage holder would have to have bid enough to cover all the prior liens in order to protect their position. In this example at least $123,000.00. Then the property would be theirs to sell and try to get more than $123,000.00 to get some of their $6,000.00 back or if they could sell it and net $129,000.00 after costs they would break even. The second mortage holder would have to bid enough to cover all the prior liens in order to protect their postion. In this example at least $88,000.00. Anything above the $88,000.00 that the winning bidder paid they get to keep up to the $35,000.00 owed them. The second mortgage holder would have to then try to sell the house for a net of $123,000.00 in order to break even. There are books written about this subject.

Answer 2

Once you have recorded a lien in the land records it ties up the title to the property. The owner cannot refinance or sell the property without paying off your lien. Sometimes you need to be patient and just wait. If the lien is for a substantial amount you can pursue your action to the next step, have the sheriff sieze the land and sell it. In that case it would be subject to any liens that were recorded before your lien such as a mortgage. Your state laws would govern that process. Otherwise you must be patient and make certain that you inform yourself about the statute of limitation on your lien and that you re-record it before it expires. In Massachusetts a recorded attachment or execution is good for six years and can be brought forward if an extension is recorded before the six years is up.

Answer 3

If you obtained a court judgment and then recorded it in the land records the buyer's attorney or title company will find the lien during the title examination and will insist that the seller pay it off. If there is no title examination done at the time of the sale the property will be sold subject to your lien and the buyer will be stuck with your lien on the property. If there is a substantial amount of money involved you should consult an attorney about possibly forcing a sale.

Answer 4

When a lien is recorded against your property you cannot sell or mortgage the property until the debt is paid.

Answer 5

Yes, you can file a lien. It may not get covered in the foreclosure sale.