Short Sale CASE STUDY: 009

A Lesson in Liens

I received a message from the processor at Wells Fargo right before Thanksgiving that they found a judgment against the seller for $451.40. My title company showed no such judgement and is willing to insure a clean title.

Why is this a big deal?

Clean Title.

In order for a property to be passed from one person to another, it needs to be free of liens (claims) against it. The transfer of ownership is recorded in the county that the property resides in. Title insurance is often purchased to ensure that there are no other claims to the property that would jeopardize the buyers ownership.

In this case study, the Sellers bank has run a name search and found a judgement against someone with the same name as the seller.  This judgement could be
a lien against the property that will need to be dealt with at closing.

FHA = Non-negotiable

Remember that this is an FHA loan on this property and thereby subject to certain rules.  One of those rules is that they will only pay out a certain dollar amount to any subordinate lien (claim in a secondary position) on the property. They have allowed $2500 to be paid. That shouldn’t be too big of a deal considering the judgment is much less than that.  Even with legal fees and interest it shouldn’t be a problem.

However…

According to the title company, this judgment is not recorded in the county the property is in and so it won’t get attached to it. They have issued a Preliminary Title Report that dos not show this lien on it.

Prove It

The lender has requested proof.

In the event, the debt is not the mortgagor’s please provide a notarized common name affidavit referencing our title instrument/book numbers

You want me to what now?  I have asked for clarification.  I don’t know what their title instrument/book numbers are.  I can get a notarized Common Name Affidavit easy enough.  I would rather just send them the Title Report with a note from the Title company stating that they will insure this transaction.  That should be enough for all parties envolved.

Overdue Task

As it stands now, I have an overdue task asking me to upload the approval letter from this fictitious lien so the file can move forward. I obviously can’t complete this task so I messaged the negotiator and asked for an alternative solution or for them to provide me with more information so I can get the form they want completed.

Stay Tuned…

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  1. […] asked for it to reference the judgement case number that they had on file. Remember this from CASE STUDY: 009? In the event, the debt is not the mortgagor’s please provide a notarized common name affidavit […]

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