Friday, September 06, 2013

query: what does it mean "liens to be divested"

Usually when we talk about divesting liens, we are talking about foreclosure. Divesting can also take place in a judicial sale of real estate aka a free and clear tax sale.

What happens is that a court action is used to clean the title.  If proper procedure is followed certain types of liens can be cleaned from the record - or divested.

For instance, if a mortgage lender is in first lien position and they foreclosure, if they gave proper notice to a second mortgage lender, then  the second mortgage lien is divested through the foreclosure action.

Some types of lien are not typically divested such as municipal liens or property taxes.

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