What is the responsibility of a foreclosure company to see that superior liens are paid prior to the person foreclosing upon a real property...

Question

What is the responsibility of a foreclosure company to see that superior liens are paid prior to the person foreclosing upon a real property getting the property transferred into their name? Apparently the foreclosure company was well aware of state and federal liens upon the owner of the property, but those liens remain unpaid after the real property was transferred into another person through a foreclosure company. I am wondering about the foreclosure company being complicit in a scam to move the property out of reach of the creditors - am I correct this should not be allowed?

Answer

No. You are entirely mistaken. The foreclosure company has absolutely zero obligation to do anything about any liens, senior or junior. All the foreclosure company is obligated to do is convert the deed of trust being foreclosed into a foreclosure deed to the buyer at the sale. This automatically wipes out any junior liens and inserts the buyer in the chain of title at the place of the lender. That's it.

You also appear confused regarding how liens work. Once a lien has attaches to property, it stays attached until paid or foreclosed. So you can't put property out of the reach of creditors by transferring it to another person. The transferee just winds up having to pay the debt or get the original debtor to do so, in order to clear the title of the senior liens.