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Updated over 9 years ago on .
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How to deal with loan modification liens on a subject-to deal
We've got a subject to deal under contract with a $160K loan, $215K ARV. During the title search we discovered 2 additional liens for roughly $11K each. We have the documents - they are both loan modifications that looked like they came from Housing and Urban Development. We have gotten the loan payoff amount from the lender and one of these two liens shows up as an additional expense required at payoff ($160K PLUS $11K additional). The other lien appears to have been rolled into the existing, modified $160K loan (the principle, interest rate and end-date all changed after the other lien was signed.)
How do we deal with these? We want to leave the $160K loan in place and it is still a good deal even with the additional $11K required at payoff.
Question 1: Can we get the lien that was rolled into the original loan released now as it is covered by the existing $160K loan?
Question 2: Our intended exit strategy is to sell with owner financing. When we try to sell the home, will carrying 1 or both of these additional liens to closing be an issue or "as expected" for a subject-to being sold with owner financing?
Question 3: Should we work to remove the lien(s) ourselves directly with HUD and the lender? We have a limited power of attorney. OR is this something the title company should work for us?
Thanks in advance for your advice!
Lenna