is there a law or guideline as to the amount allowed to pay a judgment lien holder to remove and/or release the lien before short sale?

Asked by skyzno_limit, San Diego, CA Mon Jul 15, 2013

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Kirt Kingzett, Agent, Sherman Oaks, CA
Sat Nov 9, 2013
No set answer, really depends on what the creditor will settle for, just be sure you get "in writing" payment is in full and no future payments
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Fred Herman, Agent, Staten Island, NY
Fri Nov 8, 2013
no. 100% will surely work. anything less than 100% is up to the lien holder.
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Yanni Raz, Mortgage Broker Or Lender, los angeles, CA
Fri Nov 8, 2013
This is generally case by case and you would need to determine what the lien holder will accept as full payment. If you want to know what the law states, you should contact an attorney. In my experience, it is up to the individual lienholders and they are all different.
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Melinda Boni…, Agent, Woodland Hills, CA
Tue Jul 16, 2013
This is a very good question. I have run into this several times on some of my short sales. I have had to negotiate with the second lien holder even after the first accepted and we were ready to close. It will also depend on what type of lien is on the property. (contractor, personal, etc.) The best you can do is try and settle with the bank so that everyone is happy and can move on. Good luck to you!!!

Melinda Bonini
White House Properties
DRE 01326360
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Sara Mehrpou…, Agent, Los Angeles, CA
Mon Jul 15, 2013
Usually it depends on how much is owed on the judgment lien and then how much money they will agree to take to release the lien. If the judgment is against the homeowner/seller, then the lien holder may take a small payment to release the lien from the property & then allow the short sale to close (the judgment remains with the person though).

Let me know if you have any questions.

Sara Mehrpouyan CDPE
Short Sale Specialist
Rodeo Realty
Direct phone 818-903-2040
dre license #01712757
0 votes
Emily Knell, Agent, Huntington Beach, CA
Mon Jul 15, 2013
I am not a a lawyer my following answer is based on my opinion & experience & 100% success rate closing short sales with 2nd lien lien holders.

In conjunction with the above statement: No there is no law, each lender has their own guidelines & each Individual deal is different. Each short seller is different with their other assets, income etc. & the 2nd lien holders also base their decisions on what to demand for "payoff" to the 2nd lien based on those factors. Each bank who holds a 2nd lien decides what to demand to release their lien as "paid in full" & allow the short sale to occur.

I want to give you an answer that starts off with "Typically 2nd lien holders ask for X" but I really can't even do that.

If you would like a more thorough answer to your Own unique situation whether you are in fact on the buyer end of a short sale or if you are the seller, please shoot me an email directly, I don't look back on this same Trulia thread for answers posted after mine.

Emily S. Knell
562-430-3053 c
Realtor Since 1996
Realty ONE Group
100% Short Sale Success Rate in CA
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Steve Quinta…, Agent, Albuquerque, NM
Mon Jul 15, 2013
1. Your goal is to obtain insurable title.
2. Focus on lawful liens recognized by the title company.
3. The general rule is the lien holder is entitled to be paid the full amount of the lawful lien.
4. The lien amount should be itemized so you can do the math for correctness.
5. Judgment liens sometimes travel from creditor to creditor at a discount.
6. You may be able to negotiate a discount under the theory that something is better than nothing.
7. Beware of awakening a sleeping creditor; they may want part of your wages or personal property.

Some lawyers in your area probably are skilled at debtor-creditor negotiations. They may recommend a bankruptcy for you to get rid of certain of your creditors or have another strategy that will maximize your position.
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Kirt Kingzett, Agent, Sherman Oaks, CA
Mon Jul 15, 2013
Not sure if there's a law and I'm not a lawyer. Usually it's what the lien holder accepts as full payment to release the property or what asset they have it attached to.
0 votes
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