A foreclosure sale generally has the effect of divesting and terminating all junior encumbrances on the real property.

Question

Quizplus · Accepted Answer

This is true because when a property is sold at a foreclosure sale, the proceeds from the sale are used to pay off the senior mortgage or lien. Any remaining funds are used to pay off junior liens or encumbrances in order of priority. If there are not enough proceeds to fully satisfy all junior liens, they are typically terminated and no longer attached to the property.

A Foreclosure Sale Generally Has the Effect of Divesting and Terminating