To explain this as simple as possible, when you buy a home and get a loan for the home, the lender puts a lien on the property. By doing so, the property becomes collateral for the loan. So, in the event the homeowner is unable to make payments, the lender can force the sale of the home to get paid (foreclosure). There can be several liens at one time on a single property! In Texas, lien priority is based on when things get recorded. Texas is a (true) notice state. So let me give you a not too uncommon example to illustrate lien priority. We have an 2009 original 1st mortgage on your home in the amount of $400,000.00 (this was a voluntary, contractual lien - you needed the money to buy the house, so you contractually agreed to put the house up as collateral by obtaining a 30 year fixed rate loan - REL Note and Deed of Trust) which now has an unpaid balance on the loan of $250,000 with $15,000 worth of monthly payments in arrears which includes all back payments, late fees, attorney fees and all the other fees that have been tacked on by the mortgage lender. This was recorded 6-20-2009. We have a 2nd lien from 2016 in the original amount of $90,000 for a swimming pool improvement with a current balance of $60,000 with $5000 in arrears including the back payments and fees. This was recorded 7-21-2016. We have two judgment liens - one with Citibank for $9,000 recorded 3-2- 2017, and one with Amex for $8,000 recorded 4-2-2018. We have a $6,000 IRS tax lien for unpaid personal 1040 taxes recorded 10-20-18. And finally, we have $12,500 in unpaid ad valorem property taxes for 2018 and 2019, with another $5,000 due for 2020 but have until 1/31/2021 to pay. The 1st mortgage is foreclosing on the first Tuesday in January, 2021 - what is the opening bid at the foreclosure sale auction? The property is worth $400,000 to $450,000. 1. What should Is mortgage bid to protect its interest? 2. What amount, if any, should 2nd mortgage bid to protect its interest? 3. What happens to IRS lien upon foreclosure? 4. What happens to the Citi and Amex liens upon foreclosure? 5. What is the minimum amount that one would pay as a buyer/investor at auction? To explain this as simple as possible, when you buy a home and get a loan for the home, the lender puts a lien on the property. By doing so, the property becomes collateral for the loan. So, in the event the homeowner is unable to make payments, the lender can force the sale of the home to get paid (foreclosure). There can be several liens at one time on a single property! In Texas, lien priority is based on when things get recorded. Texas is a (true) notice state. So let me give you a not too uncommon example to illustrate lien priority. We have an 2009 original 1st mortgage on your home in the amount of $400,000.00 (this was a voluntary, contractual lien - you needed the money to buy the house, so you contractually agreed to put the house up as collateral by obtaining a 30 year fixed rate loan - REL Note and Deed of Trust) which now has an unpaid balance on the loan of $250,000 with $15,000 worth of monthly payments in arrears which includes all back payments, late fees, attorney fees and all the other fees that have been tacked on by the mortgage lender. This was recorded 6-20-2009. We have a 2nd lien from 2016 in the original amount of $90,000 for a swimming pool improvement with a current balance of $60,000 with $5000 in arrears including the back payments and fees. This was recorded 7-21-2016. We have two judgment liens - one with Citibank for $9,000 recorded 3-2- 2017, and one with Amex for $8,000 recorded 4-2-2018. We have a $6,000 IRS tax lien for unpaid personal 1040 taxes recorded 10-20-18. And finally, we have $12,500 in unpaid ad valorem property taxes for 2018 and 2019, with another $5,000 due for 2020 but have until 1/31/2021 to pay. The 1st mortgage is foreclosing on the first Tuesday in January, 2021 - what is the opening bid at the foreclosure sale auction? The property is worth $400,000 to $450,000. 1. What should Is mortgage bid to protect its interest? 2. What amount, if any, should 2nd mortgage bid to protect its interest? 3. What happens to IRS lien upon foreclosure? 4. What happens to the Citi and Amex liens upon foreclosure? 5. What is the minimum amount that one would pay as a buyer/investor at auction