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redbone1918 · Jun 24, 2012, 02:50 PM

What if I was the 2nd mortgage holder on a property and the person stopped paying me and I had a lien on the property, mean while the property was foreclosed on and then sold with out my knowledge. What are my rights

ScottGem · Jun 24, 2012, 03:12 PM

You should have been notified of the foreclosure. But the question is whether the primary lienholder's lien balance was more than the property was worth. Either way you should have been informed and you can file suit against the plaintiff in the foreclosure.

As to the sale, you can also sue whoever managed the closing since your lien should have come up in a search. You did file the lien with the county?

Fr_Chuck · Jun 24, 2012, 03:16 PM

Agree, you had filed your lien at the court house and it was on record for the property.

Two things happen at foreclosure,
1. if it sells for more than the first loan and sell costs, then you get money.
2. if it sells for less than the first loan, you basically don't get anything.

Not knowing how much first loan there was, seldom do the sell bring in much money, and normally the bank itself takes it back ( without your lien on it)

redbone1918 · Jun 24, 2012, 03:52 PM

Scottgem just answered a question for me and I would like to know if there is a time limit and which I have to take action after the sale of that property?

redbone1918 · Jun 24, 2012, 04:09 PM

I was a 2nd mortgage lien holder on a property the owner stop paying me and evidently stop paying the 1st mortgage. I have a lien recorded in the court system of Alabama . The property was foreclosed on and I was not notified, also the house was sold and I was not notified. What are my rights and how long after the sale of this house do I have to take action.

ScottGem · Jun 24, 2012, 05:18 PM

Originally Posted by redbone1918

Scottgem just answered a question for me and I would like to know if there is a time limit and which I have to take action after the sale of that property?

Yes, but I'm not sure what the Statute of Limitations would be I suspect at least 2 years,

P.S. Please use the Reply or Quick answer to reply to a thread, don't start a new question.

Originally Posted by redbone1918

I was a 2nd mortgage lien holder on a property the owner stop paying me and evidently stop paying the 1st mortgage. I have a lien recorded in the court system of Alabama . The property was foreclosed on and I was not notified, also the house was sold and I was not notified. What are my rights and how long after the sale of this house do I have to take action.

Was it recorded in court or with the county. A lien needs to recorded against the deed. Why would you record a lien with the courts unless it was the result of a judgment? You said you had a second mortgage. That mortgage should have been secured by a promissory note listing the property as collateral. That note should have been recorded with the deed.

redbone1918 · Jun 24, 2012, 05:26 PM

I am not sure whether the promisary note was recorded with the deed and the lien it was a result of a judgement .

Fr_Chuck · Jun 24, 2012, 05:30 PM

If it was never recorded, there is little you can do, that is your obligation to file your own lien.

ScottGem · Jun 24, 2012, 05:41 PM

Originally Posted by redbone1918

I am not sure whether the promisary note was recorded with the deed and the lien it was a result of a judgement .

This is not very clear. You received a judgment on a suit against this person. To pay that judgement, he gave you a promissory note. But you did not register that note against the deed? Is that the situation? If so, then the lien was not know and would not show up in a title search. Its also why you were not informed of the foreclosure. So you probably have no case anywhere.

redbone1918 · Jun 24, 2012, 05:54 PM

The promisary note was signed at the same time as the junior mortgage and ilt should have been filed with the mortgage

AK lawyer · Jun 24, 2012, 06:08 PM

Originally Posted by redbone1918

I am not sure whether the promisary note was recorded with the deed and the lien it was a result of a judgement .

You are saying different things. Did you have a judgment or a second mortgage.

If it was a second mortgage junior to the first mortgage, or a judgment lien recorded after the first mortgage, you would be out of luck (unless the property went for more than the amount owed at the mortgage foreclosure sale), except for the fact that you say you weren't notified of the foreclosure. If this is true, you could foreclose on your second mortgage (or judgment).

Originally Posted by ScottGem

... Either way you should have been informed and you can file suit against the plaintiff in the foreclosure.

As to the sale, you can also sue whoever managed the closing since your lien should have come up in a search. You did file the lien with the county?

Actually, you would file suit against the buyer at the foreclosure sale, who may or may not be the same as the plaintiff.

Originally Posted by redbone1918

I am not sure whether the promisary note was recorded with the deed and the lien it was a result of a judgement .

I don't believe the note is normally recorded. The mortgage is.

Speak to an attorney in your jurisdiction who knows something about real estate foreclosures.