M has four liens, which were recorded in the following order: $150,000 on the mortgage, $2,000 to a general contractor for a new roof; $3,000 for unpaid county property taxes; and a $12,000 judgment for credit card debt. The bank forecloses, and the house sells for $152,000. How is the money will most likely distributed?

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Business

Trevin Taylor

17 August, 10:51

M has four liens, which were recorded in the following order: $150,000 on the mortgage, $2,000 to a general contractor for a new roof; $3,000 for unpaid county property taxes; and a $12,000 judgment for credit card debt. The bank forecloses, and the house sells for $152,000. How is the money will most likely distributed?

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Answers (1)

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Carleigh Curtis · Answer 1

First the bank will collect its $150,000 and then the county will collect $2,500 in unpaid property taxes.

Explanation:

Generally, liens get in line depending on the time that they were recorded (contractor then credit card) but property taxes have superiority over other liens even f they were recorded before. After the foreclosure, the liens cease to exist, but not the debt. The property will still owe $500 in taxes and the previous owner will still owe $3,000 to the contractor and $12,000 in credit card debt.