Types

• Several types of liens can be placed on a property. Liens can be the result of a mortgage or second mortgage or can be filed for unpaid property taxes, unpaid homeowner assessments, unpaid income taxes, and delinquent debts. Any lien holder on a property can take action to foreclose.
  
  

Lien Priority

• In a foreclosure, liens are paid off in the order of priority. The priority order is established when a lien is originally filed. First mortgages are known as senior liens, because they are filed with the closing of the property. Any subsequent lien is known as a junior lien and is behind the senior liens for payment in a foreclosure. If there is no money left over after paying off the first mortgage lien in a foreclosure, junior lien holders will leave empty-handed.
  
  

Likelihood

• The likelihood of a lien holder filing a foreclosure due to nonpayment is greatly influenced by the amount of the lien, the balance of the first mortgage, and any home equity currently held in the property. In most cases, junior lien holders will not file a foreclosure, as there is little hope of being paid. However, the lien has to be cleared if the property owner attempts to sell the property in the near future; the balance of the lien is deducted from any proceeds of the sale at closing and paid to the lien holder.