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Hello,
I sold a home on which I had a home equity loan. The lender must not
have filed the proper paperwork because it did not show up as a lien
during a title search at the time of sale.
Question now is since I no longer own the property, is it now
considered an unsecured debt which could be discharged through
bankruptcy? Or, could they do something like file a lien against my
current home (did not own my current home at the time of the loan).
Any info would be appreicated.
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"extremepcs" <extremepcs@yahoo.com> wrote:
I sold a home on which I had a home equity loan. The lender
must not have filed the proper paperwork because it did not show
up as a lien during a title search at the time of sale.
Question now is since I no longer own the property, is it now
considered an unsecured debt which could be discharged through
bankruptcy? Or, could they do something like file a lien
against my current home (did not own my current home at the time
of the loan).
So you sold or transferred the property without notifying the
lender? They may not have recorded the mortgage, but you still
signed it. So your failure to notify them may be considered fraud.
If fraud, it could be excluded from discharge in bankruptcy. In
other words, even if you file bankruptcy, you could still owe the
money.
Your best bet is to just pay off the loan.
Stu
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extremepcs wrote:
Hello,
I sold a home on which I had a home equity loan. The lender must not
have filed the proper paperwork because it did not show up as a lien
during a title search at the time of sale.
Question now is since I no longer own the property, is it now
considered an unsecured debt which could be discharged through
bankruptcy? Or, could they do something like file a lien against my
current home (did not own my current home at the time of the loan).
Any info would be appreicated.
Filed lien or not, you may have bigger troubles than the loan. It may
well be a crime there to sell secured property. I can't imagine that, at
closing, you didn't sign somewhere in the paperwork that the property
was owned by you, free and clear. That false statement alone may bring
you under attack from the buyer. Did you find that the title search
missed the lien and just figured you'd take the lender's money and run?
--
Gerald Clough
"Nothing has any value, unless you know you can give it up."
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Hello,
I sold a home on which I had a home equity loan. The lender must not
have filed the proper paperwork because it did not show up as a lien
during a title search at the time of sale.
Didn't *you* know about it at the time of sale? Why didn't you disclose
this?
Don't assume the lien wasn't properly recorded- after all, it's possible the
searcher made a mistake. If so, then *you* could be in hot water with the
buyer for fraud.
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extremepcs wrote:
Hello,
I sold a home on which I had a home equity loan. The lender must not
have filed the proper paperwork because it did not show up as a lien
during a title search at the time of sale.
Question now is since I no longer own the property, is it now
considered an unsecured debt which could be discharged through
bankruptcy? Or, could they do something like file a lien against my
current home (did not own my current home at the time of the loan).
Any info would be appreicated.
Firstly, consult a local real estate and bankruptcy atty for real,
specific advice about your exact situation. Anything we tell you here
on MLM is just a guess because we don't have all the facts.
Any decent title searcher can determine fairly quickly whether your old
lender had filed the proper paperwork to establish a lien on your old
home, or not. If they did have a lien and it wasn't satisfied at time
of sale, the lender may have a claim against whoever screwed up during
the settlement process and caused their rights in the collateral to be
impaired. That may or may not include _you_ depending on your
knowledge and acquiescence in settling on the sale without satisfying
their lien.
However, even if the upshot is that your debt to the lender is now
unsecured, it is still a debt you owe, and yes, they can sue you for
it, get a judgment, and use that judgment to have a lien placed on your
_new_ house. It would be junior to your existing first mortgage but,
hey, it was junior on your old home too. I'm guessing that is the
course they would pursue if they don't get satisfaction from whoever
screwed up the sale process. You would have to consult a local
bankruptcy atty with all the facts of your situation to tell whether
the unsecured debt could be discharged in bankruptcy before it is
reduced to judgment and becomes a lien on your new property.
Bottom line: consult an atty locally.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
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Question now is since I no longer own the property, is it now
considered an unsecured debt which could be discharged through
bankruptcy?
This might be considered fraud, actually. You did know about the lien,
notwithstanding the fact that it didn't show up on the title search.
You could have mentioned it during the closing process, but you didn't.
Morerover, you used the money from the sale of your old home to buy a
new home without first paying off the equity loan on the old house.
I suspect this is treated like any other secure debt where the
collateral is no longer in your possession.
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