10-07-2012 07:41 PM - edited 10-07-2012 07:42 PM
Thoughts, opinions, feedback, and information would be greatly appreciated.
The numbers and names have been changed to protect those involved.
* person's account goes to collections
* the account then goes to the attorney and he files a lawsuit
* judge issues a judgment
* lawyer goes back and asks for a property (real estate) lien
* judge issues a real property lien
* the maximum time passes
* before the lien expires, the attorney goes back to court to renew the lien
* judge awards the "renewal" on the lien
* somewhere in all of this, the person does a quick claim deed of the property to someone else
* somewhere in all of this, the bank is made aware of what is going on
* after lien renewal, the "owners" of the property are ready to walk away, do a quick sell, dump the property
* property is available for purchase
* the property is worth 100k
* the mortgage is worth 50k
* the collection/attorney lien is worth 200k
* the "owners" can not even think about selling the property for what it is worth or what the lien's are worth (mortgage and collection/attorney)
* the "owners" quick claim deed the property to me
* I pay off the current mortgage and closing costs
* the "owners" get a few bucks in their pocket
* I "own" the property but there is still the collection/attorney lien on it
* I ignore the collection/attorney lien forever and ever OR I try to settle with the attorney for a much smaller amount of money for a lien release
* someone (either the original owner or the current owners or a bank representative) negotiations with the attorney for a lien release for approximately 23k
* the mortgage gets paid off at 25k
* the remaining 2k pays the sellers costs for closing
* What could backfire with Proposal A? B?
* Could the attorney force a sale of the property to satisfy the lien?
* Could the attorney change tactics and decide to personally come after me if I own the property?
* The "owners" are ready to allow the house to go into foreclosure (they are done with this property and it's legal problems). Can they legally try to negotiate a settlement for the collections/attorney lien, even though it developed from someone else's collection? (I think they can since the lien follows the property, not the property owner, per se.
* Based on the attorney's behavior of renewing the lien after xx years, what are the "chances" that the attorney would pay off the mortgage of 25k so that they would own the property outright? The condition of the property is such that it can not be a rental or income producing property. Nor could they sell the property for what is now "owed" on it. I think the original debt is very close to the equity in the property. Does not include legal fees or interest.
I am looking forward to reading all the speedy replies! Thank you!!
** edited to do a spell check!
10-07-2012 08:07 PM
I would love to comment on your post, but it made my head hurt. Even if a Quit Claim deed was made, since there is a lein on it, wouldn't it automatically go to them? I really don't know your property laws, but I agree, the lein goes with the property, not the owners. Hopefully someone on here will jump in and comment that knows a lot more than me. Good Luck!
10-07-2012 08:14 PM
The beauty of the quick claim deed - it is JUST transferring ownership of the property from one person to another. Lein holders are not notified of the change. I would still need to satify the bank lien or risk foreclosure. Not sure about the other lien. I am hoping the several people can respond who know the general rules about this.
The original debtor did this to escape the debt/legal proceedings against him.
Lol - the short version - guy refused to pay his bill, creditor went to court to take his property, guy "gave away" his property somewhere in the process so he would not have to pay. New owners don't want the property, the headaches, or the liens so want to sell it and be done with it. What are my options to obtain the property? What are the possible consequences?
Please tell me if this is easier to understand. I never meant the first one to make your head spin! I was just being detailed, hoping it was enough information.
10-07-2012 08:24 PM
I believe I would talk to a property lawyer on this one. I've had some property given to me by relatives by filing Quit Claim Deeds, "I'm pretty sure this is what you're talking about, I've never heard of a quick claim deed". But it had no leins or anything on it. Maybe you could negotiate something with the lein holders and find out exactly what it would cost to satisfy them.
10-08-2012 11:08 AM
This is one of those times where you would need to get a good real estate attorney. Ask him to do a quiet title action - those take quite a while (a year is typical).
Chat with him about your risks in taking over a property emcumbered with a lien. There are risks.
The quit claim deed is the very weakest form of deed you can get - in essence it is the opposite of a warranty deed.
Good luck with this. Don't do it without speaking to a very good real estate attorney. Bring him all the info so he can advise accordingly.
10-08-2012 03:00 PM - edited 10-08-2012 03:03 PM
I just want to add on more data point of information. The reason QUIT CLAIM DEEDS are the very worst type of deed is because any one can prepare and record a Quit Claim deed on any property in the country.
The person signing the Quit Claim deed (Grantor) is saying that they are passing any claim or interest (as in ownership interest) to the property that they "may" have in the property to the Grantee (person receiving the deed) but there is no representations/warranty that they actually own or have any interest in the property that they are quit claiming!
For example, I can quit claim my interest in the Sears Tower - but I don't have any interest in the Sears Tower so the Quit Claim is meaningless. The person receiving the quit claim deed only gets the interest in the property that the Grantor (person that signed the quit claim deed) actually has. If there is no ownership interest, that's exactly what the Grantee gets - nothing! That is why you, as a buyer, don't want a quit claim deed as a general rule.
10-10-2012 10:59 AM - edited 10-10-2012 11:00 AM
Thank you for the information!
The whole topic of Quit Claim Deeds came up between my husband and I. We found out that the original owner of the property did the Quit Claim Deed to someone else. The other person thought they had received their inhertiance early! When the new owner went to cash in on the property, he was SHOCKED to learn that besides a very small mortgage on the property (which someone is paying - not sure who) that there was a HUGE lein on the property.
My fake numbers probably did not illustrate the financial picture very well, plus I have new information. The collection lien is actually about 3.5x the value of the property. The new owner is now looking to dump the property any way he can. He has tried to settle the collection lien, but has been unsuccessful in reaching an agreement.
And the new owner wants to walk away with cash. I can feel for him. And I am glad I am not in his shoes.
I decided to wait on the property. I gave the new owner's representative some suggestions on how to "settle" with the collection lien holder. In the end, the lein holder can ask the judge to force the sale. And with the lien on there, being renewed with interest and fees every ten years, there will never be a way to get a loan against the property to improve it.
** edited to correct a grammar error.