Posted by JohnBoy on August 26, 2003 at 15:19:45:
I would still send certified letters to both, the attorney and the lien holder, demanding they immediately release their bogus lien from your property, and time being of the essense, or face civil suit for slander of title. You don’t want this to take forever to get resolved where the attorney takes his time to resolve this. You want this resolved ASAP! Otherwise they may drag their feet on this.
Bank won’t go in second position!! - Posted by Tim (CT)
Posted by Tim (CT) on August 26, 2003 at 09:32:17:
REPOST from FINANCE forum. Just trying to get viewpoints from others.
Here’s the situation:
My brother and I own a house free and clear outside of a $2,000 lien. The property is worth $140,000 (bank did a drive-by appraisal). First off, the lien placed against the property is invalid due to the fact that it’s monies my parents owed (they live in the house and my mother has life-use) a previous landlord. So, how can a lien get placed on an asset they don’t own (nobody seems to have an answer for that - including the attorney who placed the lien 10 years ago!!). O.K. No big deal, I’m thinking. Even if the lien is valid, there’s still $138,000 in equity!! All we’re trying to do is get a home equity line of credit for $50k. The bank we’re dealing with won’t do it unless they can get into first position. Does this make sense to anyone?
Any thoughts are appreciated
Re: Bank won’t go in second position!! - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 26, 2003 at 11:23:36:
Tim–(CT)------------
Is JohnBoy correct in his supposition that your parents never owned the property? I’ll bet that the story is that your parents owned the property at the time that the lien was filed against them. If that is so, the lien is a legal lien against the house. Or at least it was at the time that it was put on.
Then, when your parents or your mother deeded the property to you and your brother the lien was not paid off because you guys did not go through an escrow. So, the lien may well have been legal at that time also.
However, there is some good news. Liens have statutes of limitations. They expire or evaporate off of property after a certain number of years, typically 5 years or 10 years. Unless they are renewed by the lienholder–or the attorney for the lienholder. Here in CA, the renewal must occur before the lien statute of limitations cause it to expire.
Find out what that statute of limitations is in CT. See when the lien was first recorded in the county or township land office. See if it was renewed.
DO NOT CONTACT THAT ATTORNEY UNTIL YOU DO THE ABOVE! You might just wake up a sleeping dog and get a bite on your ankle. Suppose, for instance that the lien is going to expire in October of this year. You alert the attorney to that old lien and the attorney, being a good attorney realizes that the lien is nearing expiration and thus renews it for another 10 years. In such a circumstance you keep your mouth closed and your fingers off the keyboard. If the lien is not renewed, then you go for the refinance in November.
Good InvestingRon Starr*******
Re: Bank won’t go in second position!! - Posted by JohnBoy
Posted by JohnBoy on August 26, 2003 at 10:51:53:
Since the attorney who placed the lien does not know, DEMAND that he release the lien that HE placed against the property. Tell him you will sue him for slander of title if does not release the bogus lien!
Send him a certified letter demanding the release of the lien or face a lawsuit for slandering your title that he had no right to place a lien against since your parents never owed the property.
Re: Bank won’t go in second position!! - Posted by Ken (in Iowa)
Posted by Ken (in Iowa) on August 26, 2003 at 10:40:49:
Why don’t you simply have the bank pay off the $2,000 lien out of your equity LOC at the time of closing so that there will only be their one lien against the property? That way nobody’s in second position. You can either increase the line to $52,000 so you’ll have $50,000 available or accept the balance of $48,000 after lien payoff.
Ken (in Iowa)
Re: Bank won’t go in second position!! - Posted by Tim (CT)
Posted by Tim (CT) on August 26, 2003 at 12:24:17:
Thanks for the reply.
Neither my father nor my mother have ever owned the property in any way, shape, or form. My grandmother owned it and my brother and I received the property through probate based on her will. The lien was placed about 6 months after the home was deeded to us. It should be an invalid lien. I believe CT has a statue of limitations but I’m not sure what it is. In my opinion, it’s a moot point. The lien shouldn’t be there and I have been in contact with the attorney (about 2 hours ago) to try and remove it. He’s checking the title search done in which the bank ordered. He said if he can’t find my parents on title during that period, he’s going to remove the lien. He was very cooperative.
Re: Bank won’t go in second position!! - Posted by Tim (CT)
Posted by Tim (CT) on August 26, 2003 at 10:56:46:
THAT’S THE ANSWER I’M LOOKING FOR!!! Thank you Johnboy. I just wasn’t sure if that was an avenue I could pursue. I definately want to put pressure on this attorney to either validate it or get it off. I’m going to check with a local attorney to see how we can push this.
Thanks for the reply!!
Re: Bank won’t go in second position!! - Posted by Tim (CT)
Posted by Tim (CT) on August 26, 2003 at 10:53:26:
Sure, that’s definately an option but I want to keep it as a last resort. I’m of the position that the lien should never have existed in the first place. So, why should I give this guy 2k from this equity when he’s not entitled to it from this equity. I’m not going to drag this out too long. It’s only 2k but at the same time, it’s principle.
Thanks for the reply.
Re: Bank won’t go in second position!! - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 26, 2003 at 13:19:28:
Tim–(CT)-------------
Thanks for the clarification. Perhaps your grandparents are on your father’s side and your father and grandfather’s names are similar? That could account for the mistaken lien.
Sounds like you things working in the right direction. Soon the lender can be in first position.
Now you have stepped into the real world of real estate investing. Solving problems caused by other people that block you from getting what you want. This may be your first experience along these lines. But, if you continue in real estate investing, I can guarantee that it won’t be the last.
Good InvestingRon Starr*******
Re: Bank won’t go in second position!! - Posted by Nate(DC)
Posted by Nate(DC) on August 26, 2003 at 13:20:23:
Have the settlement company escrow the $2K at settlement and then try to get the lien removed. If you succeed they will release the $2K to you. Meanwhile you got your loan and don’t have to wait.
NT
Re: Bank won’t go in second position!! - Posted by Tim (CT)
Posted by Tim (CT) on August 26, 2003 at 13:24:04:
Problem is: The bank won’t even approve the LOC due to the fact that there’s a current line in first position. They want me to come out-of-pocket to satisfy the lien first. Then they’ll approve it.
I spoke with the attorney. He’s doing some checking now. If he agrees it’s invalid, he’s going to speak with the lienholder and get it released. Shouldn’t be a problem then.