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Maryanne, Home Buyer in Mullica Hill, NJ

buying a home with a mortgage lien on it in Jackson. How long does it take to have it removed and should I just give up and look for another home?

Asked by Maryanne, Mullica Hill, NJ Fri Oct 7, 2011

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Maryanne’s answer
Thanks everyone,

To answer your questions, the house is not a short sale. I made an offer and was told there was a judgement on the home that needed to be resolved prior to closing. I was lead to believe that it was a divorce judgement.
My offer was accepted and we signed contracts and went into attorney review. At that time my lawyer disclosed that there were issues with the home.
I then contacted the municipality to inquire about these issues.
Apparently, there were three mortgages taken out on the home. The first was for $325 in 2005 when the home was first purchased. In 2006 there was another mortgage for $167, which is the mortgage that the seller is trying to have discharged. In 2007, she obtained another mortgage for $436 which is the primary mortgage. The original mortgage of $325 was dissolved when she obtained the one in 2007, so I guess she refinanced the original amount and then made improvements on the house.

Our lawyer told us that the owner has filed to have the $167 mortgage removed in court, but I don't know how long that takes. She filed it on August 24th. She claims that the $167 mortgage was fraudulently obtained and her signature was forged on the documents and she filed a petition to have it discharged.
On top of this, she has missed mortgage payments on the $436 mortgage (again I found this out from the municipality) and we don't know how much is owed for that. My lawyer has repeated asked for a copy of the amount that is owed from the sellers attorney so we know that what we are paying will cover what is owed on the house.
Right now, with both mortgage amounts of $167 and $436, it is more than what we agreed upon.

I am just worried that this will take a very long time and that the bank with the $167 mortgage can put a lien on the home at a later time when it is in our possession.
This is why I am not sure if we should wait for this home or just settle on something else instead.
0 votes Thank Flag Link Sat Oct 8, 2011
Maryanne: A second lein can be removed. The second lein holder needs to release it and many times they do. Do you know how much it is? Has anyone told you that they are talking with the second lein holder? Have you spoken to your agent to get the story?

I had one just last month that endedup closing because the second lein holder agreed to take half the amount owed and bank for the first lein agreed to pay the difference after the agents kicked in some.

Bottom line, do you like the house enough to wait on it or do you want to move on to another house? Your agent should be able to give you a better picture of what is happening.
0 votes Thank Flag Link Sat Oct 8, 2011
Maryanne,

I'm a little confused even after reading your question and comment below. Any mortgage creates a lien on the house and must be paid prior to its sale. When you buy a property and obtain a mortgage, the mortgage document creates a lien on the property which is basically the lender's security for the debt - should the mortgagor (the owner) not pay the bank will protect its rights under the lien and foreclose. So I'm unclear as to your question. Any home that you are looking to buy that hasn't been paid in full by the seller will have a mortgage lien on it.

In your comment you mention that the homeowner (seller) is in preforeclosure and that you did not know this prior to making your offer. Are you saying that its a short sale and that the amount you offered is not sufficient enough to cover both liens and obviously the seller has no money to bring to closing to cover the liens? If the house is a short sale, it must be disclosed that its a short sale in the listing. If it wasn't disclosed and now you find out that its a short sale and a short sale is not something you want to continue with then you should move on to find another home.

Again, I reiterate any home that is mortgaged will have a lien on it until the mortgage is paid off and any home listed for sale that is a short sale must be disclosed.
0 votes Thank Flag Link Sat Oct 8, 2011
Maryanne,

In lay terms . . .you are purchasubg the property at list price, plus the cost of the lien of the second mortage line in full AND ANY OTHER LINES that may be uncoverved udringf the titled earch. I honestly don't care who the seller is "figfhting" the bottom line is that once u tkae possesion, it's yours.

R u representeing by a Realor? The biggest misconecption today is that you can buy a property without a realtor and his/or expertise or support by a broker. Frnakly. this is not a market I would do without. as so manu things change daily it's mind boggling.

Again, I am of the belief that if you buy this home, you buy the lien also irregadless of whether the owner is continining to "fight". Don't tkae a chance, use an expert and protect yourself.

Francesca Patrzio, Broker Sales Associate, ePRO, SRES
732.606.2931 (24/7)
Francesca@patrizioRE.com
Web Reference: http://www.PatrizioRE.com
0 votes Thank Flag Link Fri Oct 7, 2011
Hi Maryanne,
If you are already in contract to buy the home and it was discovered that there is a lien that needs to be satisfied before you can close, then it is best to discuss your options with your real estate attorney. It really depends on wether there are sufficient funds from the proceeds of the sale to satisfy the lien holder and give you clear title or not. If it can not be determined at this time and they can't give you a definitive answer as to how long it will take you might want to look for another home. I live in Jackson and I can tell you that there some very nice homes on the market at very affordable prices so you should be able to find one easily. .
0 votes Thank Flag Link Fri Oct 7, 2011
Thank you.
There are actually two mortgage liens on the home. One is the primary mortgage and the other is a home equity loan for a smaller amount. I was told that the owner is fighting the smaller HEL saying it was obtained fraudulently and she filed a petition in court on August 24th to have it discharged. She is also apparently in pre-forclosure and my attorney has asked for a letter showing a payoff amount, but it has been two weeks already and her lawyer has still not submitted it.
I did call the municipality and inquired if the water and taxes were up to date and I was told that they were paid on time.
I was not aware of any of this when I made an offer on the home and was only told about it during attorney review. Attorney review started on Sept. 14th and we have not had the home inspected because of this.
I am not sure if I should continue...
0 votes Thank Flag Link Fri Oct 7, 2011
Tax liens come first then mortgage liens. The length of time it would take to have the lien removed would depend on the bank. Typically the mortgage coma my would get the lien paid by the sale of the home. I suggest having your agent speak to the listing agent and keep looking for homes.
If you have time to wait before making above and are getting a good deal then hang in there. If not, there are plenty of homes on the market to choose from. You amy want to consider a newly constructed home that has a warranty. Builders right now have ready to move in homes that they are discounting. They can also pay closing cost and have incentive for buyers that can move quickly.
0 votes Thank Flag Link Fri Oct 7, 2011
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