topic Re: Something not disclosed in a loan in General Credit Topics

Something not disclosed in a loan

Anonymous — Tue, 23 Apr 2019 19:00:04 GMT

I'll keep this as short as I can. Last year, my husband and I had a big local heating comapny install equipment in our home. They offered financing, which we took advantage of. The salesman took my husband's info over the phone, and then called me back later to confirm that we had financing. On the day of install, I asked about the loan paperwork and was told that "it didn't matter". Install went on as planned.

When we received the loan book, we noted that a $200 origination fee had been applied. We complained to the heating company, and they gave us a freebie from them worth about $200. Not thrilled, but...whatever. Until now...when I find that the Credit Union has secured the title of our home. As in, as I'm trying to refinance, we have to go through the subornation process. On a loan we never signed for, that we never were disclosed two really important things. Working on paying that loan off ASAP, but feeling really screwed in the meantime. Is what they did legal?

Re: Something not disclosed in a loan

Shooting-For-800 — Tue, 23 Apr 2019 20:08:51 GMT

Contractors can file liens without any financing if they do work on your home.

Not sure if it is related but there are all kinds of issues like this in the home improvement industry.

Re: Something not disclosed in a loan

Anonymous — Tue, 23 Apr 2019 22:38:21 GMT

Yes, this is called a mechanic's lien. It's a lien placed by a contractor or subcontractor. It's so the person supplying the materials and labor gets paid back.

The laws around this vary by state. Some states require advance notification of a mechanic's lien, and some don't. If you're in a state that does require it, it may render it unenforceable. Sometimes, it's the monetary value that's a trigger for a mechanic's lien - in some states the work has to be over a certain amount.

My office was working on a road project that went through a neighborhood as the result of a settlement - the contractor sent notices to the homeowners bordering the road they were putting a mechanic's liens on the properties touching the road. In this case, it was standard practice gone awry - the property owners actually had no financial responsibility for this project. It wasn't a case of the contractor not being paid, either - they hadn't even finished the road improvement yet. It was my job to smooth ruffled feathers over that. LOL.

You'd have to do a bit of checking around for the laws regarding mechanic's liens in your state. The financing component of it, and the $200 origination fee, sounds like an in-house thing and would not be related to the lien itself. Sounds like you got that part handled. I'd be miffed about that too, and want to see the terms and conditions and any and all paperwork regarding it.

Re: Something not disclosed in a loan

CreditInspired — Wed, 24 Apr 2019 11:11:18 GMT

One very important lesson here. Don’t ever have anything done without your copy of the signed contract in hand! I honestly believe you dodged a bullet. Suppose the company had installed a more expensive unit than you had agreed on and the cost was $2K higher. Just food for thought.

Re: Something not disclosed in a loan

DaveInAZ — Wed, 24 Apr 2019 19:47:33 GMT

Well, it's not clear to me what's going on here. Posters seem to think it is a Mechanic's Lien. DboB states that "on the day of install, (he/she) asked about the loan paperwork and was told that 'it didn't matter'. Install went on as planned." Did they sign paperwork accepting the completed work? I would think that to place a Mechanic's Lien a contractor would have to have some documentation that the work was done with the property owners' consent & acceptance of the work. If not I think I'll go get a contractor's license and put a couple hundred thousand bucks of mechanic liens on folks I don't like.

Secondly, DboB states that "I find that the Credit Union has secured the title of our home". The CU couldn't have placed a lien on the property without loan documentation. Presumably the contractor signed over a Mechanic's lien to the credit union? This would seem a pretty shady practice for a credit union. Bob's Payday Loans, perhaps, but a credit union, no.

And what's the interest rate on this loan? A loan secured by a lien on a property would be the equivalent of a Home Equity loan and should have an interest rate around 6%. If this is the result of a Mechanic's lien assigned to a credit union I suspect it is much higher.

Re: Something not disclosed in a loan

Anonymous — Wed, 24 Apr 2019 21:20:13 GMT

Yes, if you took out a contractor's license, and performed either the type of work or the monetary value that qualified for a mechanic's lien, you could put a lien on the home of the folks you don't like. However, they'd have to hire you first.

Usually, this type of thing is in the fine print of whatever contract was signed with the HVAC people in order to perform the work. Somewhere in there, it would state that a mechanic's lien is a possibility. A mechanic's lien is independent of financing. It would have happened whether the OP took advantage of their financing, or not. It's tied to the work performed. However, a notice of a mechanic's lien is state-dependent. In California, they did do a mailed notice, and for my road work project I noted at the time it was certified mail, too. It's different in other states, but I would have no idea of the specifics of each state.

As far as a 'credit union' putting a lien on their home, it may be that the lien is held by a credit union, and that is what would be showing up on the home's title report. All liens and mortgages on the property would be listed on the title, but I don't know how it would present itself; as in 'DaveInAZ's Contracting' or the bank that you use for financing as a convenience for your customers. The lien would remain on the title until the work is paid off - financing or otherwise.

Now, as far as not getting the loan paperwork and the company representative stating it 'didn't matter,' that's a different issue. I agree with the OP - I'd be pretty upset. Always, ALWAYS get a copy of anything involving money. Especially a lot of money. It always matters.

(let us know when you get that contractor's license - I have a short list of prospective customers for you....)

Re: Something not disclosed in a loan

Anonymous — Wed, 24 Apr 2019 21:28:26 GMT

The lien is held by the Credit Union. I will never again allow work to be done on our home without knowing the full details of any financing. I'm still pretty hot about this. I filed a complaint with the board that regulates CU's in our state. I'm immolated at the idea that a loan was made in my husband's name, a lien placed, and no signatures were involved...and he *never* talked to the sales person *or* the CU. That just seems totally shady to me. In fact, our mortgage guy told us that this particular CU has a lot of complaints regarding this very issue.

Re: Something not disclosed in a loan

Anonymous — Wed, 24 Apr 2019 22:53:59 GMT

Good, glad you're going to pursue it. If you don't hear what you need to from the credit union and the contractor, think about talking to an attorney.

Re: Something not disclosed in a loan

Barneygirl — Fri, 26 Apr 2019 20:44:06 GMT

I agree with BlueOak... I'd be calling an attorney. In the state of MN, when you build a new home (even if the builder holds the loan and SELLS it to you) and contractors aren't paid by the builder they can put a lien against your home (Not bothering to go after the builder). There's insurance to cover us who choose to build new... and it's come in handy. HOWEVER, if you have NO PAPERWORK, and there was NO SIGNATURE, there is NO CONTRACT.... and therefore YOU should not be liable for the cost, nor should there legally have been a lien placed against your home. Is the CU reporting this loan to the credit bureaus? Does it show up on your credit report? Sounds SUPER SHADY... and not sure how a CU could legally do this. Pick up the phone and talk to an attorney, most will chat about the situation for free & let you know what your rights are. Good luck!!

Re: Something not disclosed in a loan

Anonymous — Sat, 27 Apr 2019 11:11:20 GMT

In order for a mechanics lien/contractors lien to come into existence there Has to be non-payment to the contractor, not to mention work done on property pursuant to the contract with the property owner. Here the former was never alleged to exist. As a matter of fact, there was financing through the credit union to pay the contractor. The contractor was paid. Therefore no mechanics lien is possible.

Maybe a home-improvement loan was taken out through the credit union with the property as security? Either way to attach to the property one or two things Has to happen. Either there Has to be non-payment for a contractor to create a lien, which then must be followed up by a lawsuit to acquire a judgment, Or paperwork had to be signed conferring a security interest in the property by the property owner.

If neither of these occurred, then it’s void and you may not even be legally responsible to pay for it. Equitably and morally may be another story.

You need to see this paperwork confirming a security interest and find out if it’s a loan, who signed it and then head down to law-enforcement to swear out a complaint for forgery.

If it’s a mechanics lien, they’re typically limited to one year before they expire. Within that timeframe the contractor Has to bring a lawsuit to acquire a judgment. All this varies by state. But if the lien could not be created absent nonpayment. And even if it was, it’s only good for a certain period of time unless they sue you and get a judgment.

You need to go get this paperwork find out what it is and go see an attorney.

Re: Something not disclosed in a loan

RobertEG — Sat, 27 Apr 2019 22:43:01 GMT

The Truth in Lending Act places specific disclosure requirments on lendors prior to or at time of closing of a loan.

They cannot simply close a loan without providing the contract details, and unless you have signed the loan papers, you likely did not have a valid loan contract.

I would strongly recommend an initial, and usually free, consultation with an attorney for review of their apparent lack of compliance with the provisions of the TILA.

Re: Something not disclosed in a loan

Anonymous — Tue, 30 Apr 2019 20:19:12 GMT

So, it looks like what happened is that someone in the process, other than us, esigned the loan documents. It wasn't me or my husband, as neither of us have these documents in our email, and the CU doesn't have an email address for either of us. We received a call from the CU today as part of the investigation flollwing my complaint with the state board that regulates them. This could get interesting. I suspect that the end of the story is that the salesman we dealt with did some shady stuff to get the sale to go through. Waiting on the CU to do their internal search for the esigned docs.

Re: Something not disclosed in a loan

Shooting-For-800 — Tue, 30 Apr 2019 20:28:40 GMT

We we signed edocs for mortgage, IP addresses were automatically recorded on the paperwork....

Re: Something not disclosed in a loan

Anonymous — Wed, 01 May 2019 01:08:07 GMT

@DboB It’s as I suspected there is a loan, not a mechanics lien. Also as @RobertEG correctly points out the TILA has very specific requirements. Somebody is going to get burned for forgery here. You need to find out what technology they use for E-signing their loans. Some FIs use Docusign some use other products. No matter what, they all typically record IP address, login GPS coordinates, etc. Some shady salesman will do it and sign your name while at your house so the GPS coordinates correlate with your home to make it look as if you signed it.

However if proper procedures are followed, you are emailed a link which you have to open from your email and then you must esign it and complete it. Afterwords you are emailed a copy of the completed counter signed document. There will be plenty of forensic evidence here to prosecute whoever forged your names. Likewise, those documents are void ab initio (from the beginning) because you never executed them. To echo the advice by @RobertEG, you need to run, not walk, down to a lawyers office.

Re: Something not disclosed in a loan

Anonymous — Wed, 01 May 2019 01:11:39 GMT

You may be entitled to be reimbursed for all the payments you have made, since you never entered into a valid loan agreement. However, the FI may have a claim for those funds under unjust enrichment.

You really must seek the advice of a qualified attorney to review the specific facts of your case and give you proper advice.