CHAPTER 13 The Distressed Home
Among the most common conditions that disrupt a real estate transaction is a “lien.” A property lien on a home is an unpaid debt that could squelch your home sale. A lien is a legal notice that’s fi led in the county court in which the property is located securing an unpaid debt with a “hold” against the property. If a creditor wants to get your close attention and/or to secure the payment of the debt, it could take legal action by placing a lien on your biggest asset — your home. Liens are more common than most buyers and sellers realize. A lien can result from unpaid taxes (federal income or county/ municipal property), a court judgment, or unpaid bills (e.g., utility services). Liens attach to your property and give the lienholder a security interest in that property until the debt is discharged. When a lien is placed on your property, certain restrictions are placed — for example, you can’t take out a second mortgage, sell, or re fin ance your property until the lien is paid o ff and removed by a subsequent cour t fi ling. VOLUNTARY LIENS In signing your mortgage loan documents, you gave a “volunteer lien” to your mortgage provider. Although you own your home and hold the title as owner, the mortgagor has a security interest in the value of your home up to the amount you owe on your mortgage. A voluntary lien is a claim that one person has over the property of another as security for the payment of a debt. A voluntary lien
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