Unsatisfied loan never on credit report

[Anonymous]

I just received a call from the lawyer that is handling the loan for the buyer of my house.  He said that that I had a $5,000.00 loan from 1990 that was unsatisfied with a bank that I do not remember banking with.  This is the first time that I have ever heard about it.  It has never shown up on any credit reports.  I borrowed 20,000 in 2003 from my credit union and it never showed up.  I have never been contacted by anyone teilling me that I owed this money.  What are my options for reconciling this?  This will hold up the sale of the house.  Thanks.

[ezdriver]

So is the debt yours or not? Request a debt validation. Whethe or not it showed up on a credit report has nothing to do with with whether or not you owe the money.

[StartingOver10]

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@Anonymous wrote:

I just received a call from the lawyer that is handling the loan for the buyer of my house.  He said that that I had a $5,000.00 loan from 1990 that was unsatisfied with a bank that I do not remember banking with.  This is the first time that I have ever heard about it.  It has never shown up on any credit reports.  I borrowed 20,000 in 2003 from my credit union and it never showed up.  I have never been contacted by anyone teilling me that I owed this money.  What are my options for reconciling this?  This will hold up the sale of the house.  Thanks.

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Take a look at your public records for the property you are selling. If you didn't pay back the $20k it is entirely possible there is a lien from the CU on the property. The lien/judgement may or may not show on your credit report. If there is a lien or judgment it will have to be paid. One of the ways it is paid is by having the judgment amount + interest and other fees deduced from your proceeds at the time of sale. 

It can hold up your sale if you don't have enough proceeds to pay for the judgment lien. Have you spoken to your title company yet? Usually the first thing they do is run title for the property and liens, judgments and anything filed against you are the property shows up as an item to be satisfied prior to or at closing. 

[ezdriver]

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@StartingOver10 wrote:

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@Anonymous wrote:

I just received a call from the lawyer that is handling the loan for the buyer of my house.  He said that that I had a $5,000.00 loan from 1990 that was unsatisfied with a bank that I do not remember banking with.  This is the first time that I have ever heard about it.  It has never shown up on any credit reports.  I borrowed 20,000 in 2003 from my credit union and it never showed up.  I have never been contacted by anyone teilling me that I owed this money.  What are my options for reconciling this?  This will hold up the sale of the house.  Thanks.

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Take a look at your public records for the property you are selling. If you didn't pay back the $20k it is entirely possible there is a lien from the CU on the property. The lien/judgement may or may not show on your credit report. If there is a lien or judgment it will have to be paid. One of the ways it is paid is by having the judgment amount + interest and other fees deduced from your proceeds at the time of sale. 

It can hold up your sale if you don't have enough proceeds to pay for the judgment lien. Have you spoken to your title company yet? Usually the first thing they do is run title for the property and liens, judgments and anything filed against you are the property shows up as an item to be satisfied prior to or at closing. 

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You are pointing the OP in the correct direction of course ... but I'm baffled that a lien would be placed on one's property with absolutely no notice to the property owner. It would be interesting to learn what happended in this unusual case.

[StartingOver10]

CU would have placed the lien at the time when he took out the $20k - as a mortgage. 

If it was an unsecured loan for $20k, then the CU could have gone after him with collections/lawsuit and then default type judgment if the OP didn't respond. It's very possible that a default judgment was issued without the OP knowing (I see it from time to time at listing appointments). 

I love CU's, but I have noticed that they are very quick to go after their money if the consumer defaults. 

Of course, the only way to know for sure is to check the public records which the OP can do on his own or through the title co that is closing the sale. 

[ezdriver]

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@StartingOver10 wrote:

CU would have placed the lien at the time when he took out the $20k - as a mortgage. 

If it was an unsecured loan for $20k, then the CU could have gone after him with collections/lawsuit and then default type judgment if the OP didn't respond. It's very possible that a default judgment was issued without the OP knowing (I see it from time to time at listing appointments). 

I love CU's, but I have noticed that they are very quick to go after their money if the consumer defaults. 

Of course, the only way to know for sure is to check the public records which the OP can do on his own or through the title co that is closing the sale. 

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As a listing agent, would you have checked the public records on the property before listing it? I persoally checked when I was in general real estate sales up in Connecticut as I wanted to ensure that my brokerage would be paid and to do some rough calculations to estimate net proceeds from sale to seller.

[StartingOver10]

You betcha I check...even before going on the appointment. Then when I ask about their mortgages(s) and liens there has been several occassions where the information I have from the public records doesn't match the information the seller provides to me. Then we discuss the discrepancies. Could be an error on the banks part by not recording a Satisfaction or could be something else.  

Naturally it is critical to estimating proper Seller proceeds.

However, I have also seen in the MLS a property that is listed as a regular sale and when I check mortgages or liens the property is short. Quite a few times I have called listing agents and asked if $X was paid off and their answer is "I don't know."  

I agree with you that those that don't do their homework can get bit. Sometimes a lien comes out of nowhere, but more often I find they just 'forgot' about it.