Refinancing Mortgage and Need to Settle Property Lien Debts
We decided to refinance our home and during the process discovered that my husband has four judgments, liens on our property. Needless to say, we can't do anything until we settle it to have it removed. The collection lawyers are being very uncooperative and refusing to accept any offers we make, they're willing to cut $3k of the top (on the lien the amount equals to $11,367.95) but they're stating that the total owned is actually $13,371.23. We offered .30 on the dollar.
Am I better off paying a lawyer to negotiate with them now that the judgement have been granted since they're refusing to meet us half way? They say that their client would almost prefer us not to settle right now because they will be accruing interest over the years ($1,600/yr) at 12%.
—WGT
I would be better able to provide you the feedback you are looking for about settling a property lien if you answer the following questions:
What state do you live in?
Who were the original creditors these debts were owed to? And were the collection suits filed in the name of the original creditor, or a debt buyer? If a debt buyer, what are their names?
How long ago were the judgments entered in the court?
Did you mention at anytime that you are trying to refinance?
Settling your debt when there are liens on property is not always going to be straight forward.
There are many situations where you would be able to settle unpaid debts for 30%. But in the last stage of collection you are in, where there are judgments and liens, 30% settlements are just not that common. Here are some reasons why settling property lien debts settle at higher rates:
A judgment creditor can use current trends in your local home market to determine your home’s value. Your credit report generally shows your mortgage debt (first, second mortgage, HELOC), and the balances still owed on them. Because judgment liens have to be cleared up eventually, in order to pass on clear title to a purchaser, or when refinancing, they can make a fairly good guess at whether they should hold out to get paid more. This may be the precise reason why you heard the attorney say the client would be better off holding out.
More questions:
What is the current estimated value of your home?
What amount do you still owe on your mortgage (including a second and HELOC)?
You will often be settling debts that resulted in a property lien with an attorney debt collector. Generally, debts are settled with attorney collectors at a higher percentage than when settling debt with a typical collection agency. This is certainly not always going to be the case. I have worked several files and settled property lien judgment debt for very favorable savings, even as low as 30%. These instances are fewer though, and situational. I would need to learn a lot more from you about your personal situation.
There are other details that debt collectors, attorney or otherwise, will use to determine what amounts to settle for. Real time access to your credit report means the ability to see what debts you are current on, or that remain unpaid. Sometimes these collection shops subscribe to software the takes a whole host of information and spits out a collect-ability score. The collector may use that scoring to set a floor for what they will accept as a settlement. You can often get them to budge over time, but if you are trying to push a refinance through, your time may be limited.
Watch this video interview I did with a former debt collector about negotiating debts before buying or selling your home.
Hiring a lawyer to negotiate your debt.
There are very good reasons to hire an attorney when you are dealing with debt collectors, and especially collection attorneys. When it comes to hiring an attorney to simply negotiate and document a settlement, it may not be necessary to go to the expense.
Using attorney debt settlement services if there are legal maneuvers to make in order to resolve your debts more favorably, can make the cost of hiring an attorney worth it. There are also instances where the cost of the settlement the attorney negotiates, combined with the attorneys fees, are about what you would have gotten without the attorney.
I am not sure what you have done to date with your own negotiation efforts, but answering my above questions in a comment reply, could help me to give more specific feedback.
Depending on your answers, I may also encourage you to call in for a free consult.
Any readers with questions or concerns about settling a property lien can post in the comments for feedback. You can speak with me directly by calling 800-939-8357, option 2 rings directly to me.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
like everyone else I read I found out when I refinanced that bank of America put a lien on my 20,000 credit card debt.now with penalties and interest it shows 28,000.they would not negosiation with me for a monthly payment.with interest prices down I could have saved 100.00 a month now I will never be able to..any suggestions..or am I doomed
Judgment debts are hard to settle for less than half.
When there is a lien on the home, where it can be seen there is equity in the home to cover the judgment if you sold or tried to refinance, it can be much harder to settle, and you often have to come up with closer to 75%.
You can strip the lien in a chapter 7 bankruptcy if you qualify in your state based on income and home equity.
Hello, this is Lien at my House was paid with a garnishment, after paid the collection company did not release LIEN.
I called Law Office, they said they had nothing to do with this Judgment and I need to call the Collection Company.
I called Collection Comp they said the Garnishment is different, even if the case or civil action case number is the same, Collection company is not willing to file an AFFIDAVIT OFR SATISTACTION OF EXECUTION or Affidavit of lost FI.FA.
What do I need to do ?
I am at Lawrenville Georgia in case the Law at this City differ from other Cities.
I would file a complaint against the law firm and the collection agency with the CFPB. More on that here: https://consumerrecoverynetwork.com/filing-complaints-with-the-cfpb/
I am in a situation where we successfully completed a Chapter 13 back on 9/20/2017. When we attempted to refinance our mortgage we found 2 leans were placed upon our home by companies that were named in the bankruptcy. One of the companies was Discover and they were paid during the entire 5 years. The other company named was House Hold Finance that has since gone out of business but was picked up by an attorney here in town. Per the chapter 13 claims and disbursements, the HFC account was unsecured and should have been paid during the bankruptcy but they failed to make a claim. How can I get these resolved so that I can get this refinance completed?
I would start off with contact your bankruptcy attorney about any help they can provide after seeing these things play out as often as they do.
Hi Michael,
In 2003 my partner and I bought a house here in California. I couldn’t qualify at the time so it’s in my partners name only (I’m on the Title). In 2007 I took out a HELOC in my name only, to start a business. Long story short, the business operated at a loss, closed in 2009 and we both ended up filing Chapter 7 BK and all our debts were discharged as we had no other assets or equity in the home. A while later we found out we had a lien against the house for the $116,000.00 we had taken out of the $150,000.00 HELOC. The original lender (a major bank) then sold the lien to a collection agency. Ten years later we now have about $250,000.00 of equity, have built our credit scores up to the high 700’s but have no intention of moving/selling the house. Is it possible the collection agency might accept much less than the full amount of $116.000.00 and would we be able to refinance the house to get the money to pay it off? (we have only $5,000 in savings), or would we probably be denied a refinance because of the lien? Whatever advice you can provide would be very much appreciated. Thank you.
Hit reply to the comment email you get and let me know some times you are available next week, and a number to reach you at. I will go over some potential options with you once I get more of the details.
We need some help in lowering our 4 liens before we sell our property. Were located in MN
Thomas F-651-706-xxxx
I deleted your last name and the last few digits on your phone number.
You can click on the get debt help tab at the top of any page on this site. That will prompt you to complete a user profile on the Resolve platform (secure and private). You can then click on the talk to an expert tab in your user profile to bring up my calendar and schedule a time to talk with me.
Hi. I live in New York (Nassau County) and I recently applied for a refinance. No money out, just to lower my interest rate. Wells Fargo approved my application and said my credit score was 781. Today I received a voice mail regarding a 2007 judgement (credit card debt run up by my ex husband in MY name). From all that I am reading, I do NOT have a lien on my home and if I’m reading correctly a lien could have still been placed on my home if attorney refiled judgement prior to the 10 year expiration which he did not. Wells sent me the judgement paperwork today and it was filed 2/7/2007. So if I qualify for the loan in every other way and there is no lien on the home nor can they in the future (if I am writing the statue correctly NY CPLR § 5203 (2012), can they still turn me down? Just a side note…back when I first found out about this judgement (never received court paperwork) I tried to settle with them just to get rid of it but wouldn’t accept my offer of 8K on a 14K debt. Now I don’t have either amount to settle, hence why I am trying to refinance so I can breathe each money in living high priced Long Island, NY. Any advise?
Even though the plaintiff did not renew the judgment (rendering it a useless piece of paper), I would be surprised if your loan went through. You would need a savvy loan officer, underwriter and title officer. If Wells Fargo is in short supply, you may want to work with an independent broker that knows how to get creative and put a file together to clear your hurdles.
I would get everything you needed to show the judgment was not renewed and is unenforceable, just to be thorough with Wells, and for use with the next lender you try to work with.
Hi Michael I have a question. I was divorced in 2007 my ex was assigned a car loan which I co-signed for while we were married. The car was repossessed and Ford Motor Credit sued her and I. She was filed for bankruptcy and it was granted. A judgement was was issued in Ford Motor Credit’s favor and I was ordered to pay 150 dollars a month. After a year of payments the Attorney representing Ford terminated the wage garnishment without my consent. A week ago I received notice that the same Attorney is re-needing the judgement and seeking 51 thousand dollars instead of the 23 thousand that was the original debt. I live in California do I have any legal argument to make to get the judgement back to the original amount. It have been 7 years and this is just now coming up. What are my options if any?
Call in for a consult Art. There is more going on here than what you may realize, or there are serious errors in the collections. You can reach me at 800-939-8357, ext 2.
I have a judgment from a credit card company from about 8 years ago on my property. I’m trying to get everything cleaned up from all of damage it did when I lost my job. The original credit card company charged off my account and the third party that had it went out of business. Not sure what I can do now to get this removed.
Who was the named plaintiff in the original lawsuit against you, or who is the collection agency that went out of business?
Im ttying to refinance my home and found out i have a lean for 128.00 dollars. Where can i go yo pay for it? I Libe in queens, new York
Who is the lien in favor of?
I live in the state of Maryland. The original creditors are at the condo HOA Association. The lien or judgement was filed in the original creditors name. The lien was entered in June 2015. They started garnishing my wages in October 2015. I received a letter in February 2016 for the same amount not showing any of the credits or payments I made. The letter threaten to Sue and place a lien on my property for the same amount and they have also accelerated my payments through December 2016. But everytime I get a statement or a balance sheet from them the amount up until December 2016 changes. They are now telling me that my balance is almost $11,000. But I know that I have paid towards the Judgment or since the judgment about $8,000. They will not release the lien until this extra balance of almost $11,000 is paid however I thought the amount that I’ve already paid will go towards the lien balance. The actual balance is about half of what I actually owe.
I would encourage you to call and speak with a debt collection defense attorney in Maryland. The efforts to collect the full balance all over again, while you are currently paying, may be violations. I can email you a list of attorneys with the experience you need if you like?
Yes please send me the contacts. Thank you!
I need guidance on how can I negotiate to settle a lien placed on my home related to a hospital visit from Auto accident
How much is the lien for? Were you sued, and if so, how long ago?
Hi,
Had a HELOC loan that I got sued on 5 years ago. The HELOC lender took the judgment and recorded it as a lien on the property. So now I have two liens. The first lien the Heloc Lender placed when I took out the equity loans and the second lien the same Heloc lender recorded when it got a judgment against me on that loan. I was able to negotiate with the law firm representing the Heloc lender to have the judgement lien removed. the law firm has sent me satisfaction letter releasing the judgement lien. My question is, what happens to the first lien the heloc lender placed on my house? the settlement paper does not reference it. Can they collect twice (once through the first lien when I see the house and second time through the settlement i entered to settle the judgment lien?). I am in virginia and we currently live in the house. We are concerned the first lien might cause problems when we sell, unless we are mistaken and both liens are erased because we settled the judgment.
How long ago did you pay the judgment?
Thanks for the reply. HELOC was taken out in 2006 for 70k. We were suedand judgment against us in 2012 for 90k. We just negotiated a full settlement on the judgment mid 2016 and now in the process of filing the certificate of satisfaction with the record office at the courthouse.
Check the title record for your county and see if they filed anything there. If not, contact them and see when they plan too. If you run into any trouble let me know and lets go from there.
Hi Michael,
Good article. Who owns the credit card debt in MA associated with liens that are 5 years old? It is still own by the creditor (e.g., Citicard, Capital One, Discover) or does a firm like Lustig Glaser & Wilson own the debt (they are listed as the agent)?. Thanks Mike
Judgment debts can be sold. You can contact the named plaintiff about the debt and if they still have it, they will either help you resolve the account, or direct you to the collector the account is with currently.
I doubt Lustig Glaser owns your account.
I have about 19000.oo combined debt on 3 different credit cards and would like to get them off so I can sell my house. I live I nc and these debts are about 5 years old.
I added a video to the original post above that I want you to watch. It is an interview I did last week with a former debt collector about your very situation.
Are you able to raise the cash to settle the judgments?
I got laid off from work, my son had a traumatic eye injury that he has had 15 surgeries for and I now have breast cancer. We have a credit card lean of $9500 on our house due to my lay off and medical bills. . We have $90,000 in equity on the house. What can we do? Thanks!!
What state are you in? What amount of unsecured debts, like other credit cards and medical bills are still unpaid?
Hi Michael, Thanks for your offer to assist,
I filed bankruptcy in 2010 and my 2nd mortgage was included in the bankruptcy ($15,000). The judgement lien was the $15 plus around $5K in attorney fees. Now, I’m selling the home. The title company, after doing a title search, sent me a message with the Plaintiff Attorney’s contact information, saying it is their understanding that I will be negotiating a settlement. I am not sure how to proceed. In this case, would it be worth it and in my best interest to hire an attorney to negotiate? If not, how does one go about negotiating a settlement when a profit will be made on the sale? Is negotiating a lower amount even feasible?? Thanks.
When the other side knows there is a sale, and enough equity in the home to satisfy the lien, there is little incentive for them to agree to take less. Did the title company send out a demand request? Are you certain the other side knows about the sale? If not,it may be worth a shot to see if you connect with a debt collector that you can quickly do a deal with, and for at least some savings.
Hi Michael, I need your help please with settling a 13k debt with FIA’s atty. Their last offer 1/15 was $8k but we only have like $2k to try to settle. We’ve not responded or tried to contact them so far.
Nice talking with you Dan. Post an update in this comment string and let me know what happened with the BofA/FIA Card Services judgment lien, and also how quickly it takes Zwicker and associates to update the court with the fact that you satisfied the other judgment and lien.
Live in Florida. I had a HELOC bad debt (account was charged off and closed 3 years ago) sold to an investment firm. Negotiated a settlement with the investment firm, paid it and the lien was released. Recently went to refinance my first mortgage but was told that the original debt owner would have to answer a few questions. On the conference call with the original debt owner, they stated that they consider the account to still be active and in collections (not what my credit report says – shows closed, charged off full amount and balance of zero). How can I owe them for something I already settled with the debt buyer? Is there any way to get this cleared up?
Who was the debt buyer you settled with? Who is the original HELOC lender? Do you have documentation outlining the settlement you made with the HELOC buyer? If so, does the document reference anything about settlement, paid in full, or anything that alludes to accepting less than the full balance?