What must a junior lienor be aware of to protect their claims during foreclosure?

A junior lienor must be particularly aware of the priority of payments during foreclosure to adequately protect their claims. In a foreclosure scenario, the proceeds from a sale are distributed in a specific order based on the priority of the liens. The primary mortgage typically has first priority, meaning they are paid off first from the proceeds of the foreclosure sale. After the primary mortgage has been fully satisfied, any remaining funds will then be distributed to junior lienors according to their order of priority.

Understanding this hierarchy is crucial for junior lienors because, if the sale proceeds are insufficient to cover the senior lien’s obligations, the junior lienor might receive nothing. This knowledge allows them to assess the risk associated with their lien and decide whether to take action to protect their interest, such as initiating their own foreclosure proceedings if necessary, or negotiating settlements with the property owner.

While the other choices pertain to aspects related to foreclosure, they do not directly impact the junior lienor’s ability to protect their claims. For instance, knowing the primary mortgage's sale expenses could provide insight into the total costs involved, but it does not influence the order of payment. Understanding the original mortgage debt amount may help in assessing the situation, but it is not as critical as the lien priority itself.