A lien is a notice that’s attached to your real property signifying that a creditor claims you owe money. Most people take out a mortgage to pay off their home. If you default on your mortgage, the creditor can place a lien on your property. A lien is public record and can be discovered through a simple title search. Real property liens are typically filed with a county recorder’s office. Liens on real property are commonly used by creditors to collect what is owed. In that regard, creditors may act to foreclose on the property.
Removing a lien on a property can be a complicated and stressful process, and it prevents you from selling your home until the lien is removed. Below are various ways a person can remove a lien on real property.
A property lien can put a “cloud” or irregularity in the chain of title of a property. Clouds on title are discovered during a title search. It is important to remove a lien before you refinance or sell your home as both require clear title. During a property transaction, a buyer, their mortgage lender and the title insurance company will review the title history of the property in question to ensure that the buyer can purchase the property without any liens or encumbrances. If the seller has any outstanding liens, a buyer can back out of the home purchase, even if the buyer is already in contract to buy the house. Moreover, banks and lenders will not provide a mortgage to a new buyer until all liens on the property have been removed.
For purposes of selling or refinancing a home, it’s important to remove a lien after a debt has been fully satisfied. To remove the debt, you must:
If you have a lien on your property, fear not; there are several different ways to remove the lien. A lawyer can help you navigate through the process and file appropriate paperwork. They can also negotiate with a creditor to potentially lower your debt. A real estate attorney will be able to explain the various options available to you under the laws in your state.
Last Modified: 05-11-2017 08:45 PM PDTLaw Library Disclaimer
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