question about a lien on a home

What is the name of your state? South Carolina

Ok in a situation like this what could happen. A house was just refinanced but when they did the title work it came up a lien was on the home and the mortgage company couldnt refinance it due to the fact that they could not be in 2nd place on the loan. The company that placed it was in 2nd place to start, and would have moved up to 1st place and would've had rights to any profits as a result of sale. Long story short, the lien people agreed to accept a penalty payment when it was refinanced and agreed to remain 2nd and allow the mortgage company to stay in 1st, hoping they would still get there money from any surplus of sale on the home. and thats where it is now. Question is, they are waiting for the home to be sold so they could get their hands on some money. Now, what if an equity loan was taken out of the house prior to sale, thereby eliminating any equity, and thereby eliminating any profits. Then when you sell after the mortgage company gets the principal, they then have to recieve the home equity balance. Leaving the lien company with nothing left to collect. but the homeowner has all his profits that he would have had on sale by taking them out early on an equity loan and or home equity line of credit.... Could this theoreticly work and what could stop it if any. thx

[HomeGuru]

[quote]Originally posted by JohnQconsumer
[b]What is the name of your state? South Carolina

Ok in a situation like this what could happen. A house was just refinanced but when they did the title work it came up a lien was on the home and the mortgage company couldnt refinance it due to the fact that they could not be in 2nd place on the loan. The company that placed it was in 2nd place to start, and would have moved up to 1st place and would've had rights to any profits as a result of sale. Long story short, the lien people agreed to accept a penalty payment when it was refinanced and agreed to remain 2nd and allow the mortgage company to stay in 1st, hoping they would still get there money from any surplus of sale on the home. and thats where it is now. Question is, they are waiting for the home to be sold so they could get their hands on some money. Now, what if an equity loan was taken out of the house prior to sale, thereby eliminating any equity, and thereby eliminating any profits.

**A: no dice, because the home equity lender would have the same problem as your first mortgage lender. The lender would need the leinholder to subordinate their position so that the equity lender would be in the 2nd position and not the third position. The leinholder will refuse and the home equity lender will say, not gonna do it.
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Then when you sell after the mortgage company gets the principal, they then have to recieve the home equity balance. Leaving the lien company with nothing left to collect. but the homeowner has all his profits that he would have had on sale by taking them out early on an equity loan and or home equity line of credit.... Could this theoreticly work and what could stop it if any. thx

**A: nice try. I give you an A for effort. You are stuck.

well it was worth a try. but as far as being stuck im not so sure. there is another option. that is simply, since there is a 10 year statue of limitations with 3 years passed, just simply move out of the house and rent it out for the remaining time period, making money every month and leaving the lienholder with nothing forever. then when the time runs out, sell the house and by then make a hundred grand profit or whatever it is, and it is all for the homeowner. Big buisiness cant always win.