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Residential Lien question

710 Views | 10 Replies | Last: 17 days ago by SteveBott
BoDog
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AG
Question for the bankers, attorneys or those with prior experience...

I am trying to purchase a home (likely investment property), however, there appears to be prior lien that is over 8 years old from an out of state bank that is no longer solvent. I was under the impression that these are released/fall off after a set amount of years if they are not refiled by the grantor. Any truth to this?

Regardless, is this an easy fix and something I can do myself? Thanks in advance.
SteveBott
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You need to talk to a title company. They can figure out a solution
Martin Cash
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BoDog said:

Question for the bankers, attorneys or those with prior experience...

I am trying to purchase a home (likely investment property), however, there appears to be prior lien that is over 8 years old from an out of state bank that is no longer solvent. I was under the impression that these are released/fall off after a set amount of years if they are not refiled by the grantor. Any truth to this?

Regardless, is this an easy fix and something I can do myself? Thanks in advance.
If it's a bank lien, it's probably a deed of trust. They don't just go away. If it's a failed bank, some other bank took over their assets. Judgment liens have to be renewed every 10 years, or at least it used to be 10 years.

Like Bott says, see a real estate attorney.
BoDog
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ok, it is in fact a judgement lien.

Martin, so after 10 years do these just "fall off" so to speak?
SteveBott
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If your paying cash you can leave it at your own risk. Has to be removed by the title company to get a mortgage. Just call a title company Monday and get a final solution.

A judgment can be updated and continued for another 10 years if lien holder wants to pursue it.
BoDog
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Will do, thanks Steve. I am paying cash so in addition to discussing with attorney, I may just go that route. Other than trying to sell the property, what risk are involved if I go that route....?
SteveBott
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at this point you need legal advise. I defer to the attorney
schwack schwack
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Went thru a similar situation recently - except on the seller side & with a bank. Parents took out a short term/interest only loan for the purchase of a house & then paid it off about 3 months later when their old house sold. That was 15+ years ago.

In the meantime, the bank sold to another bank & my Dad, who handled everything like that, died. Fast forward to Mom selling the house. Lien turned up on the whole amount for the loan. Mom freaked. She knew it had been paid off but could not find a record of it from that long ago. Lots of handwritten notes by Dad documenting the interest payments & also one 1099 from the bank showing interest for that year & it was not much - like $1K or so. So, of course it was paid off.

I tracked down their former loan officer at another bank in town - he remembered them (because back in the day, pretty much everybody knew everybody in Bryan) and knew it had been paid off or it would have shown up when the bank changed hands. I went to high school with the president of the local branch that bought out the old bank & he, too, agreed that it had to have been paid off.

Long story short, it was assumed by all that my Dad got the payoff in the mail & never knew he had to file it with the county. With a lot of research on their part and a little bit of paperwork, the bank released the lien & the sale went thru.

Martin Q. Blank
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SteveBott said:

If your paying cash you can leave it at your own risk. Has to be removed by the title company to get a mortgage. Just call a title company Monday and get a final solution.
Wouldn't the solution be to pay the lien at closing? Why is this the buyer's problem?
schwack schwack
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Quote:

Wouldn't the solution be to pay the lien at closing? Why is this the buyer's problem?

Good, obvious question.
SteveBott
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My rec is to talk to title. There are several options and many details we don't know. Who is the seller? How much is the lien? What kind of lien? Can the lien holder be tracked down? Does seller have proof of the lien has been paid?

So yes seller needs to be actively involved. But title can be the go between all parties to find a solution. And they can engage an attorney to assist them.
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