Posted by Scott Dennis on June 30, 2002 at 17:25:59:
Perhaps I need to move to Texas then! It would be very easy to get a judgement of non-payment and put it against the house. I have heard of mechanic liens and UCC liens, but I have never seen where an unsecure debt was placed against an asset. THIS IS WHY INCORPORATION IS SO IMPORTANT! That’s why we always hear NEVER own under your own name. Keeping everything seperate would certaily prevent this sort of lien.
Scott
Discover Card has lien on Property! Help - Posted by Dee-Texas
Posted by Dee-Texas on June 29, 2002 at 07:59:24:
Hello All,
Seller called with a property 3/1…it’s a nice little rental FMV about $18K after repairs. I haven’t really seen the inside yet so I’m not sure what all it needs. It looks pretty good from the outside.
OK…seller owes $5K and two payments behind, that’s all he wants is to have someone take it. It’s in a good working neighborhood and I want it. He also says their is a lien, since it’s a rental his Discover card put a judgment on him which attached to his property that ISN"T homestead. He owes $9K to Discover.
I know these people at the bank that has the mortgage…no problem with me paying for title insurance and starting at $5K, they will give me the money in escrow for the new years insurance and taxes. I can catch up back payments or whatever.
BUT…I have NO idea what to do about the Discover card lien. I don’t want the property as long as it’s got a lien like this, it’s not worth the lien, repairs and mortgage.
HELP…anyone work with a credit card company to waive the judgment or buy it down?..and I know to get everything in writing.
Dee-Texas
Re: Discover Card has lien on Property! Help - Posted by Scott
Posted by Scott on June 29, 2002 at 23:24:36:
For starters, I do not know HOW Discover put a lien on the house! Credit Cards are an unsecured debt. That is why the interest rates are so high. Unless this person signed some special form using his/her home as collateral I don’t think that a credit card company can do that.
If so, that is new to me!
Scott
Strategy for dealing with “other” liens - Posted by John Merchant,JD
Posted by John Merchant,JD on June 29, 2002 at 22:00:47:
An inferior, secondary lien like this, placed on a property well after the 1st Deed of Trust or first mortgage lien, is automatically wiped out upon the foreclosure of the the D/T or mortgage.
So, these “many liened” properties make for bargain purchases, because frequently, there are so many liens, that the title owner has a negative equity, and a savvy investor, like you, can walk in, agree to give the poor overwrought owner a few hundred bucks to leave and let you worry about the liens.
Then you can make contact with all the secondary lien holders and explain that WHEN the first lien holder, mortgage company, forecloses, their other liens will be garbage…then offer to give them a few bucks to release their liens, and they’ll probably do it. I’ve seen some mighty slick deals like this over the years, when there appeared to be zero value left in the property.
Great advice! - Posted by Dee-Texas
Posted by Dee-Texas on June 29, 2002 at 17:24:27:
Thanks to Ron, JT and Jim!
Everyone had something really good to say and gave me a starting point and things to look for.
Monday, I’m going to the courthouse and research the judgement, getting a copy. I’ll start my do diligence and report back.
Thank ya’ll
Dee-Texas
Re: Discover Card has lien on Property! Help - Posted by Ronald * Starr (in No CA)
Posted by Ronald * Starr (in No CA) on June 29, 2002 at 13:00:58:
Dee–(TX)-----------------
One possibility is to take the property over subject to the credit card company lien. Then never pay them, never contact them.
In every state that I know of, name liens such as this eventually “evaporate” from the property and the owner’s credit record after some time as passed, IF it has not been renewed before the expiration. Here in CA it is 10 years, in OK 5 yrs. I don’t know for TX, but you can find it out easily by researching the statutes or asking somebody at an abstract company.
So, if you plan to hold for a long time, just sit it out. There is a good chance the lien will not be renewed and nothing will come of it.
You might also suggest that the property owner/seller pay down the judgment over time so as to clear up his credit history. Should he eliminate the lien that way, it will be marked satisfied in the books of the county and will thus not be against your property.
Good Investing******Ron Starr
Re: Discover Card has lien on Property! Help - Posted by JT-IN
Posted by JT-IN on June 29, 2002 at 11:47:13:
Dee:
Very good likelihood that the CC co will negotiate a fractional payoff. I have seen these sell off for 50% or less, depending upon the amount of equity in the property.
Research the judgement lien, contact the Atty of record for Discover, and dicuss with them about buying the lien. They shold be able to put you in touch with someone at Discover that can make this decision. Don’t mention that you are buying the property, or interested in same. You are just a pruchaser of liens at a disount, and thought that htis one might fit your criteria… etc, etc.
Best of luck on getting a payday here…
JT-IN
Re: Discover Card has lien on Property! Help - Posted by Jim FL
Posted by Jim FL on June 29, 2002 at 11:40:05:
Dee,
Since this is a lein on the property, I’m not sure whether or not the credit card company will play ball.
BUT…
You never know until you ask.
It may also depend on how old the judgement/lein is?
Recently someone I know was applying for a vehicle loan.
When the financing company ran their credit, a judgement/collection was on their report for $5k from a defaulted credit card account.
This was an 8 yr old judgement.
We got a copy of the credit report, and found the collection agency that has purchased the judgement, and called them to see if they’d settle.
Guess what?
They did.
We agreed to send them $780 western union right away, and they sent a letter on their letterhead stating the account was settled.
Now the letter did state that the account was settled for less than what was owed, but it was VERY CLEAR the account was taken care of.
They submitted the letter to the lender for the vehicle and the loan went thru.
Now I’m sure this was easier to accomplish because of the age of the judgement.
I have been able to assist others in getting things discounted.
So give it a try.
Heck, you could always tell the creditor that failing to settle could very well result in the defaulted barrower filing a BK and deeding the house back to the lender in lieu of foreclosure.
They will quickly realize they will get NOTHING and then begin to play ball.
Again, you’ll never know until you ask.
Good luck,
Jim FL
Re: Discover Card has lien on Property! Help - Posted by Dee-Texas
Posted by Dee-Texas on June 30, 2002 at 15:53:38:
Hello Scott,
Thanks for posting.
I talked to the title company. In Texas when you have a judgement against you it attaches to all real property…but not homestead. That’s how it’s against the property, this is a rental property.
Dee-Texas