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MORTGAGE REFINANCE HELP NEEDED (LIS PENDEN & LIEN ON PROPERTY)

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ljohn27
Contributor

MORTGAGE REFINANCE HELP NEEDED (LIS PENDEN & LIEN ON PROPERTY)

My husband has an old credit card debt that with Portfolio Recovery Agency that an attorney is handling collections. CC is from 2002 that we paid for a while but fell on hard times and stop paying. In 2006, they hired an attorney who filed a judgement against my husband and got a lien and LIS PENDEN filed on our property. We started paying it back but by that time it was almost $10k. Overtime, we've paid it down to $5417 but payments have been sporadic since it wasn't a priority...last payment was well over a year ago. It's not on my husband's credit report but I'm trying to get the lien removed so we can refinance our mortgage.

 

Can someone help answer the following questions and any other feedback to resolve this debt?

 

1) At this point, should we try to settle with the attorney to get it removed. If so, how can we be sure they'll release the lien and LIS PENDENS if settled

2) Since the debt is so old, should we hire an attorney and attempt to get it removed via a settlement?

3) How hard is it to get a LIS PENDEN removed from our property's land records and how long does it take?

4) Any other reccommendations on how we should handle this moving forward?

5) What is a LIS PENDEN and how does it differ from other liens, judgements, etc.

 

Your help is greatly appreciated.

EX 678 | TU 689 | EQ 698 LENDER PULL 07/22/2014
EX 655 | TU 690 | EQ 678 MyFICO SCORES 07/09/2014
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StartingOver10
Moderator Emerita

Re: MORTGAGE REFINANCE HELP NEEDED (LIS PENDEN & LIEN ON PROPERTY)

A lis pendens is essentially a public record filing saying that the property owner is involved in legal action and the property can't be sold without the lien being paid off. The lis pendens is one filing. The lien is a separate filing. The lis pendens is filed first. Then once the judgment has been issued, it is recorded against the property. Once you pay off the judgment and file a lien release then the lis pendens has no force.

 

You are far better off to negotiate a settlement that includes a full release of lien against the property prior to any closing. Once you do that the lien release would have to be recorded. Do not under any circumstances let the collections agency know you are selling the property or have it under contract. They will use this info against you and not negotiate at all. You are just taking care of business.

 

The long part could be the negotiations.  If the collections agency has an idea you are selling the property they will stick to their numbers including any accrued interest. So if you have the confidence to negotiate and get a lien release recorded  then do it yourself.

 

Otherwise retain an attorney to work with you on this to make sure it is done right. Make sure the attorney is knowledgeable about releasing collections and is accustom to representing DEBTORS and not creditors. If you get one that is accustom to representing creditors you are less likely to get much of a deal.

 

Don't have the closing title company do it - the collections agency will know that you are trying to sell and want every dime of the lien plus the interest.

 

Message 2 of 4
ljohn27
Contributor

Re: MORTGAGE REFINANCE HELP NEEDED (LIS PENDEN & LIEN ON PROPERTY)

Thank you so much for all the great info. If I try to negotiate how do I know they'll release the lien. How do I bring up that I need a release or do I assume they'll automatically release it.
EX 678 | TU 689 | EQ 698 LENDER PULL 07/22/2014
EX 655 | TU 690 | EQ 678 MyFICO SCORES 07/09/2014
Message 3 of 4
StartingOver10
Moderator Emerita

Re: MORTGAGE REFINANCE HELP NEEDED (LIS PENDEN & LIEN ON PROPERTY)

You bring it up early in the negtiations because without a release all you are doing is pouring $$ into an unending debt.

 

If the debt is $5k and the added fees are $5k (believe me, I've seen it) I would offer $2k (for example) for a release of lien/Satisfaction of Judgment.

 

Maybe even starting off less than $2k on a total of $10k ($5k for the debt and $5k for the accruued fees). Find out the total amount before you start negotiating so they don't bring up that separately and try to get you to pay again. Once you have a signed release (do an exchange of money for signed release) then make sure the creditor recorded it.

 

If they didn't and you have get a signed release from the creditor, then take it to your county and record.

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