Rights of Junior Lienholder/Mortgage Fraud

[IL6088]

What is the name of your state? Illinois
As the result of $40,000 in unpaid child support judgments (and a lot of work on my part) I have finally been able to place a lien on the deadbeat’s property. Unfortunately, not only does he not pay child support, he engages in mortgage fraud as well. (A loser through and through). I now find the property is in foreclosure and I am positive that a short sale is in the process of being negotiated with the lender. What are my options as a junior lienholder, if any?

• Would I be entitled to receive any payment if the house is sold in a short sale? Do I have any rights as a junior lienholder? If so how would I ascertain my rights?
• Would it be more advantageous for me if the house went through a foreclosure auction? If so, would I then have to request payment from the surplus amount in order to receive payment or is there another option?
• In any event, should I contact the lender to make them aware that I am a junior lienholder?
• Should I also let the lender know that assets are being concealed by the debtor in order for him to appear insolvent? What would happen, would this prevent the debtor from being approved for a short sale?

Please, please help as he is trying everything in his power to get rid of this property and ensure once again, that I don’t receive a dime. I can’t afford an attorney so I am doing all of this on my own. I need all the help and advice anyone can offer!

Thank you!!What is the name of your state?

[FlyingRon]

Originally Posted by IL6088

What are my options as a junior lienholder, if any?

You stand in line behind the senior ones to get your money.

• Would I be entitled to receive any payment if the house is sold in a short sale? Do I have any rights as a junior lienholder? If so how would I ascertain my rights?

A short sale is NOT an option here. When someone buys a property they expect (in most cases) that the liens be satisfied. A short sale is just an agreement by the lienholder to release the lien for less than what they are owed (typically, the sales price). Even if the first mortgage agreed to do this, your lien would still be there and the buyer would be a fool to go through with the sale.

• Would it be more advantageous for me if the house went through a foreclosure auction? If so, would I then have to request payment from the surplus amount in order to receive payment or is there another option?

If the house sells, any remainder after the seniors would be payable to you. You should contact the forecloser if this is a non-judicial foreclosure or the court if it is a judicial one.

• In any event, should I contact the lender to make them aware that I am a junior lienholder?

Wouldn't hurt in any matter. Presumably they've already noticed this if they are foreclosing, but giving them your definite contact information probably might help.

• Should I also let the lender know that assets are being concealed by the debtor in order for him to appear insolvent? What would happen, would this prevent the debtor from being approved for a short sale?

I couldn't hurt. Especially if the foreclosure results in a deficiency.

[LindaP777]

UGGGHHHHH!!!
If the house goes into foreclosure and sold at the sheriff's auction, you might end up with nothing. Mortgage and liens are paid off in the order they are recorded, with back taxes paid off before anything.
I'm not sure how it works in a short sale. I would think all liens and mortages would have to be accounted for.

[LindaP777]

QUESTION: your lein was recorded, correct?

[seniorjudge]

You may or may not lose the lien on the house BUT the child support obligations will never go away until paid.

[IL6088]

Originally Posted by LindaP777

QUESTION: your lein was recorded, correct?

Yes, the lien has been recorded in the Circuit Court of the county which he lives in and in the recorders office as well.

[nextwife]

Originally Posted by seniorjudge

You may or may not lose the lien on the house BUT the child support obligations will never go away until paid.

Or until he dies. If he has no assets subject to probate, his estate may be of no worth to you as a creditor.

[IL6088]

Originally Posted by nextwife

Or until he dies. If he has no assets subject to probate, his estate may be of no worth to you as a creditor.

Well, thats not a bad option either

I have a judgment for a portion of the total amount and am currently in the process of getting the rest reduced. He is so vindictive and has lied so many times that I can wait until he gets out of prison for fraud and starts working as a greeter at Walmart (if they'll have him) to collect, even if hes 80!