In any short sale transaction ALWAYS run a title report to view all the liens attached to a property. You must account for all liens on a property to qualify whether or not it is a short sale worth pursuing. Not understanding the different types of liens that can be attached to a property can cause issues when attempting to work short sale deals. Each lien will need to be dealt with differently and knowing the type of liens on the property will allow you to determine if you have enough time to clear these liens in order to close a short sale deal. At WHB Solutions we always review a preliminary title report to look at the number of liens on a property and who holds those leans in order to determine whether or we want to pursue a short sale. We have found that in grading our deals, we were making the best use of our times working on deals that had a high chance of closing. In general, the more liens you have the more time you will need to resolve each lien. Most of the times these liens would not be paid by the foreclosing lender but the buyer or seller. If you have multiple liens on a property you are trying to short sale, you will have understand what the liens are and how difficult it will be to get them satisfied in order to close a short sale. Understanding Liens There are a number of liens that can be attached to a property and it is important to understand these liens when you are working any short sale deal. * Bail Bond Liens †When posting bail, a bond is purchased where a percentage is paid in cash and a home is used as collateral for the rest of the bail. The bond is to guarantee that the person being bailed shows up to court and if they don’t a lien on the property will pay the bond. * Child Support Liens †Liens that are related to unpaid child support, which the state or federal government can place a child-support lien against the property. * Code Enforcement Liens †If a property is not up to the building codes, which many times happens when work is done on a house without permits, the local or county government initiate a fine, which if not paid turns into a code enforcement lien. * Consensual Liens †A lien that the owner of the property agrees and provides consent. This lien does not have to be recorded although proof of consensual lien is harder to prove without being recorded. * Corporate Franchise Tax Liens †If corporate franchises taxes are past due, the state can put a lien on any property that is owned by the corporation. * Equitable Liens †An implied (determined by a court) or expressed (a written contract) lien to satisfy a debt that is owed to a debtor, in which the debtor has no rights to foreclose. * Federal Tax Liens †A tax lien that is placed on a property due to non -payment of federal taxes. The federal government can force a foreclosure in order to satisfy the outstanding taxes owed. * Fraudulent Liens †Any lien that is unlawfully placed on your property, which is based on information that is not true. * General Liens †These liens are usually generated by use of general businesses such as an accountant or attorney. An example would be for an accountant to create a lien against a property for performance of work. The lien can be removed if the paid in full. * Homeowners’ Association Liens †Unpaid homeowners’ association dues is cause for foreclosure on the property in order to collect the debt. * Inheritance Liens †Inheritance taxes that are owed on estates of a deceased person and are not paid is cause for a lien to be put on a property within an estate. * Judgment Liens †This type is lien is awarded by a court which places the lien in order to satisfy a debt or award of damages. * Marital Support Liens †The state or federal government is able to put a lien on a home-owner’s property for the collection of unpaid marital support payments. * Mechanic’s Lien †If a property had work done by a contractor or similar tradesman and the bill is not paid, a mechanics lien can be placed against the property at the county courthouse. * Mortgage/Deed Of Trust Liens †These liens are voluntary and placed on a property as security for a repayment of moneys loaned to purchase the property. * Municipal Liens †Unpaid municipal services such as water or garbage can cause a lien on a property, which is filed by the city or county. * Public Defender Liens †Unpaid services of a Public Defender, which can be placed by the local, state, or federal government. * Specific Liens †A lien place on a specific property, such as a property tax lien, mechanics lien, or lis pendens. * Statutory Liens †Creditors that obtain security interest in a property to satisfy a debt established by state or federal laws. Examples are a mechanics or tax lien. * Real Property Tax Liens †A city or county government can place a lien on a property that has not fulfilled it’s property tax obligations. * Welfare Liens †The unlawful receipt of welfare payments can be collected through placing a lien on a homeowners property. Full Article Resourse: www.whbsolutions.com/blog/
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