What Happens to Lien on Property When Foreclosed

When a creditor is awarded a judgment lien against a debtor’s home, the judgment is recorded with the court and county where the creditor’s home is located. When a home with a judgment lien is foreclosed, the lien may be paid off all or in part if enough proceeds are received from the foreclosure sale.

Do you still owe money after a foreclosure?

After foreclosure, you might still owe your bank some money (the deficiency), but the security (your house) is gone. So, the deficiency is now an unsecured debt. … But the promissory note lives on, as does your obligation to repay any remaining debt.

What happens if you let your house foreclosed?

Foreclosure actions can wipe out some of the property owner’s debt, such as the original mortgage, home equity loans and second mortgages. If the proceeds of the foreclosure don’t cover all the costs of your second mortgage or other home equity loans, you are still obligated to pay those.