Which liens survive foreclosure

Working on our #WordWednesday to answer questions I often hear when running foreclosure sales at the Missouri courthouses....

Taxes will always be 'superliens' on the property and go before any other lien-holders....always...in every state. There are websites out there to find out the all the specifics (one was mentioned in an earlier post). But it is important to know which liens survive a foreclosure for your area.

To start with the basic answer: We will guess that it's the first lien-holder foreclosing; so a primary loan with a mortgage company. If they are foreclosing, in Missouri, I've heard that the successive liens 'go away'. So there is a chance the HELOC loan and/or the mechanics lien will be wiped out after the foreclosure sale date. We do advise looking into Home Owner Association (HOA) rules because if there is a large unpaid balance, the strict HOA's may require the new owner to bring current.
*One time I heard an investor tell me the HOA of their new property 'required' them to pay the $2,000 that was due for their property!

The hard answer: It may depend upon what lien-holder is pursuing foreclosure. If it's a second lien-holder foreclosing, the buyer at that sale will also have to pay off the first lien in order to fully own the property! So may sure to complete due diligence.


**Disclaimer. Definitely not giving legal advise. I know a great attorney (ask if you want to know too). You can also try LegalLeague100. Just sharing my personal experiences to help my personal goal to cultivate growth in and around me.