LIEN PRIORITY
A federal tax lien resulting from unpaid federal income tax trumps all other liens in terms of priority, unless subordinated as discussed above. Mortgages are the most common type of lien; however, there are others, such as tax liens for property taxes and mechanics liens for outstanding construction contracts. Other than tax liens, liens have priority in the order of filing. For example, if you have a mortgage with Bank A from 2013 and a second mortgage with Bank B from 2015, Bank A has priority (first rights) to the property. If you satisfy Bank A’s mortgage, Bank B becomes the top priority. Any future filings will become secondary to Bank B. The exception is a tax lien, which always takes priority. You can’t sell your property to buy another while valid liens are in place. Before a home is transferred from seller to buyer, it must be free of all liens, such that the buyer receives a clear title to the home. If you owe lienholders and have less equity in the house than it sells for, you might have to bring a check to the table. Once a lien is verified, you need to satisfy it to sell your property. Contact the lienholder for a payoff figure, which is the total amount owed, including interest and other charges. Paying the debt is the first half of the process of clearing a lien. The lienholder must then cancel the lien. This can take several months, depending on how quickly the lienholder acts and the volume of requests at the County Clerk’s Office. To avoid problems with the purchase, contact the lienholder and request that it endorse the lien for cancellation and give it directly to you for filing. Make a copy of the document and take the original to the clerk for cancellation. With a clear title, you’re free to sell your
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