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08-16-2007, 02:31 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| |  Lien on Title
What is the name of your state? Texas
I was about to close on refinancing my home to obtain a lower interest rate on my current contract. I was going from 10% to 6.8% interest and I was extremely excited  The day of my closing I got a call from the bank telling me that we couldn't close because there was a lien on the title and the owner of the property could not pay off the lien on that day  I bought the house signing the contract on August of 2002, registered the contract at the local court house on 5/2003, the owner took out a lien in November of 2003. I could not understand how he was able to do this  I sent him a ceritfied demand letter asking him to resolve the lien on the title and gave him 10 days to do so but he refuses to it and has refused to speak to me. What can I do? I don't have money to retain an attorney up front and I feel like there is no where for me to go for help. As of right now, the refianancing is cancelled and I'm continuing to pay my monthly payments with the 10% interest  What is the name of your state?  |
08-16-2007, 03:03 PM
| | Senior Member | | Join Date: Aug 2005 Location: St. Odo of Cluny Parish
Posts: 27,470
| | | I suspect your contract was not recorded in the land deed records of the county where the land is.
If that's true, you don't really have much recourse except to sue the guy to get your land and credit for what you've paid ... and hope the court doesn't say, "Well, that was just rent."
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08-16-2007, 03:13 PM
| | Member | | Join Date: May 2007
Posts: 682
| | Quote:
Originally Posted by np2bcp  What is the name of your state? Texas
I was about to close on refinancing my home to obtain a lower interest rate on my current contract. I was going from 10% to 6.8% interest and I was extremely excited The day of my closing I got a call from the bank telling me that we couldn't close because there was a lien on the title and the owner of the property could not pay off the lien on that day I bought the house signing the contract on August of 2002, registered the contract at the local court house on 5/2003, the owner took out a lien in November of 2003. I could not understand how he was able to do this I sent him a ceritfied demand letter asking him to resolve the lien on the title and gave him 10 days to do so but he refuses to it and has refused to speak to me. What can I do? I don't have money to retain an attorney up front and I feel like there is no where for me to go for help. As of right now, the refianancing is cancelled and I'm continuing to pay my monthly payments with the 10% interest What is the name of your state? | I'm a bit confused. When you say the owner, do you mean the seller? Do you currently own the home? And what do you mean when you say that he took out a lien? Did he take out a mortgage on the home in November 2003? What kind of lien is it? |
08-16-2007, 05:04 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | | I'm a bit confused. When you say the owner, do you mean the seller? Do you currently own the home? And what do you mean when you say that he took out a lien? Did he take out a mortgage on the home in November 2003? What kind of lien is it?
Yes, the owner is the seller. I currently have a contract for deed that we signed on August of 2002 for the property. He took out a loan for $50,000 from some lender in November of 2003. I registered our contract that we signed with the courthouse in May of 2003, meaning he took out this loan about a year after we signed the contract for deed. |
08-16-2007, 05:07 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | Quote:
Originally Posted by seniorjudge I suspect your contract was not recorded in the land deed records of the county where the land is.
If that's true, you don't really have much recourse except to sue the guy to get your land and credit for what you've paid ... and hope the court doesn't say, "Well, that was just rent." |
I took the contract for deed to be recorded in the courthouse in May of 2003. He took out this loan in November of 2003. |
08-17-2007, 08:27 AM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,250
| | | So, before you bought the house (or at least recorded the deed) you did not have a title search done??? |
08-17-2007, 08:40 AM
| | Senior Member | | Join Date: Feb 2007
Posts: 4,970
| | | He didn't "purchase" the house. He has a contract for deed. Until he finishes the contract he doesn't get the warranty deed. The c-for-d will not prevent the owner (the seller) from incurring new encumberances.
Title insurance would have been a good idea.
You really need to contact a lawyer on this. |
08-17-2007, 09:09 AM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,250
| | | Just curious if our poster's contact allowed for the owner to continue to encumber the property. Also wonder if the contract says the purchaser will get the property free and clear of all encumbrances upon closing.
I agree with Ron, get a lawyer! |
08-17-2007, 12:21 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | Quote:
Originally Posted by LindaP777 So, before you bought the house (or at least recorded the deed) you did not have a title search done??? | I did not do a title search only because in the contract itself says the title is clear of any liens or any previous contracts. Even when the title was pulled when I applied for the refiance the title shows my contract with him and the lien for the $50,000 loan. |
08-17-2007, 01:45 PM
| | Senior Member | | Join Date: Jan 2003
Posts: 17,303
| | | One can and should get title insurance when purchasing under a land contract. The vendees interest can be recorded and insured. That limits the vendor's right to further encumber the property.
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08-17-2007, 01:52 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | Quote:
Originally Posted by FlyingRon He didn't "purchase" the house. He has a contract for deed. Until he finishes the contract he doesn't get the warranty deed. The c-for-d will not prevent the owner (the seller) from incurring new encumberances.
Title insurance would have been a good idea.
You really need to contact a lawyer on this. |
So the seller can use this property as collateral for other loans even though the seller already has a signed and recorded contract for deed on this property? |
08-17-2007, 01:56 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | Quote:
Originally Posted by LindaP777 Just curious if our poster's contact allowed for the owner to continue to encumber the property. Also wonder if the contract says the purchaser will get the property free and clear of all encumbrances upon closing.
I agree with Ron, get a lawyer! | Yes, the contract does say the purchaser will get the property free and clear of all encumbrances. |
08-17-2007, 02:02 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 4,970
| | Quote:
Originally Posted by np2bcp Yes, the contract does say the purchaser will get the property free and clear of all encumbrances. | Yes, but only at the completion of the contract. For example, I may still have an original first mortgage on the property and do a contract for deed. I can continue paying off the mortgage with the money I'm receiving on the installment sale. It's only when the purchaser has satisfied the original contract that I need to deliver the unencumbered deed. |
08-17-2007, 04:22 PM
| | Junior Member | | Join Date: Aug 2007 Location: Houston, Texas
Posts: 8
| | Quote:
Originally Posted by FlyingRon Yes, but only at the completion of the contract. For example, I may still have an original first mortgage on the property and do a contract for deed. I can continue paying off the mortgage with the money I'm receiving on the installment sale. It's only when the purchaser has satisfied the original contract that I need to deliver the unencumbered deed. | The completion of the contract for deed was to take place August 6, 2007 when my credit union was ready to issue a pay off balance on the contract but that didn't happen because there was lien on the title of $45,000. The seller cancelled the closing because he said he couldn't pay the lien at that time. |
08-17-2007, 08:39 PM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,250
| | Quote:
Originally Posted by np2bcp The completion of the contract for deed was to take place August 6, 2007 when my credit union was ready to issue a pay off balance on the contract but that didn't happen because there was lien on the title of $45,000. The seller cancelled the closing because he said he couldn't pay the lien at that time. | So if I understand you correctly, the first and (new) second mortgage total more than what you are paying for the property? | |
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