What happens to an IRS and State income tax liens and the real estate tax lien when the first mortgage company forecloses?

IRS and State income tax liens, as well as county real estate tax liens are all superior in lien position to the first mortgage regardless of when they occurred. So are mechanics liens and liens for condo association dues.

I believe they all jump to the head of the line meaning the first mortgage company foreclosing will include those amounts in their bid offer at the court house steps along with their mortgage balance and foreclosure costs in order to obtain clean title at the time of the foreclosure auction. Any “inferior” or subordinate lien positions like a second mortgage are wiped out at the foreclosure auction.

One thing I believe you can count on is even if the superior liens are not paid inside the foreclosure action…they are still “live” after the foreclosure and can be perfected in other ways..ie. attaching bank accounts or new homes.

I am not a real estate attorney, so don’t take this as legal advise. Hire an attorney to review your case and your state statutes to get actionable information.