Mechanics Lien and Lien Holder Rights

[bkgerber]

What is the name of your state? Indiana
My financee's business is incorporated and he is currently foreclosing on a property of which he totally remodeled and the client's did not pay the total bill for. Intially after finding out that they were not going to pay the total bill a mechanics lien was filed on behalf of his company against the clients and the bank that they received their mortgage from. The clients had just received their new mortgage and the bank had not had time to file their lien rights before we did so. The clients hired an attorney and after a motion for foreclosure was filed he replied and received a 30 day extention for discovery and then resigned two days later from the case. Consequently the bank replied and this is what they are saying. They say that they do not care that our lien was in place first. They say that they have a larger interest in the property than we do. Now we are filing for default judgement on the property because after the client's lawyer resigned they never replied. Would we not be first in line for payment from the property if the property were to go for sheriff's sale and the bank be second?

 

[HomeGuru]

What is the name of your state? Indiana
My financee's business is incorporated and he is currently foreclosing on a property of which he totally remodeled and the client's did not pay the total bill for. Intially after finding out that they were not going to pay the total bill a mechanics lien was filed on behalf of his company against the clients and the bank that they received their mortgage from. The clients had just received their new mortgage and the bank had not had time to file their lien rights before we did so. The clients hired an attorney and after a motion for foreclosure was filed he replied and received a 30 day extention for discovery and then resigned two days later from the case. Consequently the bank replied and this is what they are saying. They say that they do not care that our lien was in place first. They say that they have a larger interest in the property than we do. Now we are filing for default judgement on the property because after the client's lawyer resigned they never replied. Would we not be first in line for payment from the property if the property were to go for sheriff's sale and the bank be second?

**A: yes, if what you stated is true. Confirm by reviewing the title report.

 

[bkgerber]

judgement issued

What is the name of your state? indiana
Our attorney filed for default judgement in court against the mortgage company and the homeowners. We received default judgement, interest, court cost and attorney fees. Now the property is suppose to scheduled for sheriff's sale. If the property goes to sheriff's sale will we receive our money first out of the proceeds? We are listed as first lien holders on the title search. I was trying to read up on what happens at sheriff's auction and it said that if more than one lien was attached the monies received would be divided pro rata, what ever that means? Also though it said that would happen if lien holders went together and filed jointly against the property. This we did not do. We filed against the homeowners and the mortgage company and received judgement.
thanks bkgerber


Sorry about that

 

[HomeGuru]

Re: judgement issued

What is the name of your state? indiana
Our attorney filed for default judgement in court against the mortgage company and the homeowners. We received default judgement, interest, court cost and attorney fees. Now the property is suppose to scheduled for sheriff's sale. If the property goes to sheriff's sale will we receive our money first out of the proceeds? We are listed as first lien holders on the title search. I was trying to read up on what happens at sheriff's auction and it said that if more than one lien was attached the monies received would be divided pro rata, what ever that means? Also though it said that would happen if lien holders went together and filed jointly against the property. This we did not do. We filed against the homeowners and the mortgage company and received judgement.
thanks bkgerber


Sorry about that

**A: see, when you use your initial thread, your new post could be understood.
To answer, you got it wrong but to your benefit. Since the biz lien is in first position on title the, monies are paid to satisfy this lien first since this lien has first priority position.
This example is why all first mortgage lenders must have first lien priority on new and refinanced mortgage loans. And why the rates on second mortgage loans are higher. Those 2nd mortgage lenders have a greater risk if real estate values drop.

 

[bkgerber]

Thank You

Thank you for replying so fast. We received judgement in November and we are hoping that this will get over soon. Our business has lost over 30,000.00 this year just from uncollectible debts and my better half is at the point of considering a different line of business. With the lack of payment for this job our business has lost it good credit rating. Accounts that we were able to buy on credit are now no longer. Cash only. The young couple that we were performing the work for will never realize what they have done to our business standing. I constantly watch Judge Joe and Judge Judy and some of the other ones on tv and I wish there was a way for us to have received punitive damages for the loss that they have caused to our business. But at this point we would be happy just to get what the court has awarded us. Construction is really slow right now and with everyone not knowing whats going to happen with our military forces people are afraid to spend. Hopefully things will pick up. The only thing that I do know is that unless your a huge corporation with a large amount of backers, being a small corporation means having nerves of steel, learning to live with either feast or famine and not being sure when or where your next job is going to be. But it can also be a very rewarding adventure when you see the look on someone's face when they see just what you can do for them. This is a great forum, keep up the good work. Thank you bkgerber

 

[HomeGuru]

Good luck to you both.