Timeline for What rights do second lienholders have in foreclosure actions by primary lienholder?
Current License: CC BY-SA 3.0
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| Dec 1, 2017 at 14:17 | vote | accept | feetwet♦ | ||
| Oct 28, 2017 at 22:15 | comment | added | ohwilleke | A nuts and bolts explanation of how the redemption process for junior lienholders in Colorado can be found at the Arapahoe County, Colorado website. arapahoegov.com/500/Redemption-Process with the linked policies citing the relevant statutes. | |
| Oct 28, 2017 at 22:10 | comment | added | ohwilleke | First mortgage holders don't have a right of redemption. Some states, but not all, give the owner a right of redemption. Most states then give junior lienholders a right of redemption. If one junior lienholder redeems, a more junior lienholder can redeem by paying off all liens senior to it. The right is exercised sequentially. Subordinate lienholders who don't redeem are wiped out if a more senior lienholder redeems. In a redemption, sometimes the amount owed on the senior liens (including sale expenses) and not the foreclosure sale price is used, and sometimes the sale price is used. | |
| Oct 28, 2017 at 22:07 | comment | added | ohwilleke | @sleske What I describe is a fairly typical approach with lots of variation in detail. Real estate foreclosure law is one of the least uniform areas of U.S. law and atypical foreclosure laws in states like California and Texas were one of the important causes of the housing bubble that led to the 2008 financial crisis. | |
| Oct 28, 2017 at 17:15 | comment | added | feetwet♦ | So I see there's something called a "right of redemption," and you're saying that subordinate lienholders share that right along with mortgagors. In any case, at most one lienholder can exercise the right of redemption following a foreclosure sale? And in that case, the redeeming lienholder only obtains ownership of the property at the sale price (plus expenses), and all subordinate lienholders are wiped out in the foreclosure? | |
| Oct 28, 2017 at 13:38 | comment | added | sleske | Interesting system, thanks for the answer. Could you add a brief note / reference about the jurisdictions where this applies? Or is it mostly the same everywhere in the US? | |
| Oct 28, 2017 at 4:54 | history | edited | ohwilleke | CC BY-SA 3.0 |
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| Oct 28, 2017 at 4:48 | history | answered | ohwilleke | CC BY-SA 3.0 |