What is a junior Lienor?

What is a junior Lienor?

A junior lienor is a lender who is not in first place on the property – there is a senior lien in front of them. This often occurs when an owner has paid down the senior and takes out an equity loan, or may be the result of a purchase.

How does a party satisfy their obligations to omitted junior lienholders?

In the case of a omitted junior lien holder, the purchaser of the property has the option of paying the lien holder outright for their interest in the property, or re-foreclosing on the original mortgage to eliminate the junior lien holder, in which case there would be another foreclosure sale.

What happens to the first mortgage if a junior lender forecloses and sells the house at auction?

When a junior lienholder forecloses, a senior lienholder recovers nothing from the sale proceeds. But the senior lien remains intact and the foreclosure buyer takes title to the property subject to the senior lien.

What is a re foreclosure?

Without clear title, the bank can’t resell the property to a new owner. So, the bank might then (depending on state law) opt to reforeclose to deal with the parties who were inadvertently left out of the foreclosure action. The reforeclosure action cleans up the property’s title and gives the bank clear ownership.

What is a closed end second mortgage?

A closed-end home equity loan, or second mortgage, is a loan for a fixed amount of money that must be repaid over a fixed term, just like your original mortgage. Borrowers typically use closed-end home equity loans to pay for a single large expense, such as a major home improvement or college tuition.

What is an example of a junior lien?

A second mortgage or junior-lien is a loan you take out using your house as collateral while you still have another loan secured by your house. Home equity loans and home equity lines of credit (HELOCs) are common examples of second mortgages. By taking out a second mortgage, you are adding to your overall debt burden.

Can a junior lender foreclose?

However, a junior lienholder is still capable of foreclosing out junior lienholders without the necessity of the senior lienholder being party to the action because foreclosure of those junior lienholders has no effect on the senior lienholder’s rights to the property.

What power do junior lien holders have?

A junior lienholder has the right to start foreclosure herself, but the senior lienholder will still be paid first. If the property owner wants a short sale—selling the house before it’s foreclosed on, in hopes of getting a better deal—all the lienholders must agree to this.

Can a junior mortgage foreclose?

In a first-mortgage foreclosure, any junior liens, including second mortgages, HELOCs, and others, are also foreclosed. And those junior lienholders lose their security interest in the real estate.

What happens after a foreclosure if there isn’t enough money from the sale to pay off all of the lien holders against a property?

What happens after a foreclosure if there isn’t enough money from the sale to pay off all of the lien holders against a property? The former owner may owe a debt to lien holders who aren’t fully paid.

How do I write a letter to pre foreclosure?

Dear (Defendant), I’d like to take this opportunity to introduce myself. My name is (your name) and my family and I have been looking for a home in your area. We realize that you and your family may be going through a difficult time and there may be a way that we can help you.