Joy, it just so happens our attorney with our title company is in the office today, so I asked him your questions. He said the new title company (the one you are refinancing with) issues a Hold Harmless letter which will permit them to go ahead and close on the refinance. It does NOT take the liens away, however what it does do, is makes the original Title Company liable should the person(s) holding the lien(s) decide to file suit. In other words, the original Title company is who would have to pay, if suit is filed.

I also asked our attorney about liens "going away". He said mechanic's liens do expire in 2 years if suit is not filed. If it is a judgement lien, it does not expire for 7 years and is renewable up to 20 years. So I guess, knowing this, it is a judgement call on your part, depending on what type of lien(s) are attached to your property. But in any case, if you get the Hold Harmless letter, you are protected.

I have included a website link to if you want to follow up.

Hope this helps

Well, I spoke to a lawyer and he seemed to think things were a little shady, but I don't feel he really gave me an answer. He said to call him if I don't hear back from the title company. So far, title company will give me a hold harmless letter...is this good or bad? The title company is still not going to pay the lien, so I am concerned for the future since I still will not have a clear title which they supposedly gave me. The title company believes the lien is invalid and will go away in two years. I still have a proble with that answer, because I am sure someone will have to pay to release it. I just feel like I am a victim here and I can't get any straight answers. There is no reference to the mechanics lien on the title committment. The title company knew, but they were just hoping it would go away. Are there any more suggestions?

Vivian gave you the 1st and best answer. Call around this weekend or Monday and talk to a couple of them if you can.

Grab your title insurance policy (if you were fortunate enough to have purchased one at closing) and go see an attorney. Good luck.

Absolutely it makes sense. Regardless to how much or how little the lien(s) were/are, it should have been disclosed, as should have the affiliation between the different entities. Afterall, if they didn't matter, you wouldn't be having the problem of refinancing would you? You might consider talking to the Peoria Association of Realtors as well from an ethical standpoint. We, as Realtors, have an Ethical code we are supposed to adhere to, and if caught using unethical practices, can cause some serious trouble for ourselves. I am an advocate for full disclosure. You might lose the sale, but at least you still have your reputation and can live to sell another day. Shame on the person who was less than honest with you!

I really appreciate all your answers. This all seems really crazy to me. We did not recieve any disclosures about the owner owning all the companies...I didn't find this out until I have been digging around this week. I know from talking to the title company, the owner's realtor, and his mortgage broker that they all knew about the mechanics lien. They keep telling us that it was a false lien. We have even talked to the person who placed the lien on the house and he claims he was not paid for all the work he did. The owner's realtor even told my husband that they thought about taking the guy to court, but it would have cost more than the lien was. I guess what bothers me is that they all knew about the lien and did not tell us. I hope this makes sense...

Joy
As Misty and the others have said, the liens should have turned up when the title search was done. You should also have a disclosure regarding "Affiliated Business" that stated all the companies involved were owned by the same person or entity. You may also want to check to see if the liens have been paid and simply not recorded. If they were not recorded at the courthouse, it would still show outstanding when in fact that might not be the case.

As the other Realtors stated, you should get representation from a Real Estate Attorney. I can recommend someone if you would like. He should be able to research the title again, determine if the liens are valid or if they have been satisfied and not recorded.

Please feel free to contact me if I can be of any service to you!

Sherry

The owner of the house bought it in his company's name. He bought it to flip. We never saw him. At closing we saw his realtor, a mortgage broker (I think that represented the owner), and our realtor. We want to refinance and save $200 a month...and that is how we found out there are 3 liens on the house. In my searching I found out the owner of the house (his company owned it), the real estate company, the mortgage broker, and the title company are all owned by the same person. Their title search should have shown the liens...but mysteriously they did not. 2 of the liens are small and from the previous owner. The third one is a mechanics lien that was put on the house 2 months before we closed.

Typically, there will be liens on a home. At minimum, most sellers have a mortage and often a 2nd mortgage. Additional liens that have been filed certainly should be disclosed on the titlework. It is customary for those liens to be paid at closing. Every transaction is different but the first questions that come to mind is whether the owner ever disclosed to you their ownership of the home, real estate company and title company? Furthermore, did he or she explain that they did NOT represent you. From the information you have stated, I would definitely urge you to speak with a real estate attorney.

Best Regards,
Misty Turnbull

Joy,

Sounds very complicated......
Under normal circumatances the liens should have been identified during the title search. Our recommendation is to consult with an attorney ASAP to get their helkp unraveling this and get to the bottom of things.

Good luck

http://www.isba.org/index.html ~ here is the link for your state bar association ~ find a real estate attorney quickly & try to assemble ALL the documents you were ever presented during your search & purchase, as they will need to review all written material in order to give you an assessment of your case. Best of luck, Vivian