Negotiating Liens against the property

[Nick D.]

Have a house under contract and Seller has medical & credit card liens against the property. Can someone help break down the steps as to confirming the all of the liens against the properties 

Also when i call to negotiate these liens, does the seller need to be on the phone or can I get a power of attorney notice and do this.

I know the liens in second position on a preforclosure property can be handled, Im just unsure of the steps needed and who I need to call for each of these liens.

[Chris Seveney]

@Nick D.

Why do you care about the liens? You should buy it with a warranty deed and title insurance. They will tell you if the attach to property

Also unless you have authorization in writing from the borrower no creditor will provide you with any information on another person. They cannot even discuss a bill in your spouses name if your not listed on it.

[Nick D.]

The house is in preforclosure and currently has about 125K in various medical & credit card liens attached to the property that’s on the land records. I want to negotiate them down and buy the property Sub 2.

If I get power of attorney signed by the seller would I then be able to negotiate the liens, or would I have to have the seller on the call.

I want to negotiate the liens since that’s where the equity is in this deal. Mortgage is at 260, seller is 45k behind payments.   the house needs about 75k in repairs.   Recent drive by BPO was 370.  There is about 5 liens in total against the property adding up to about 125k.

I hope this makes sense. Any thoughts on the next steps as to resolving these issues.  

[Michael Radney]

Quote from @Nick D.:

Have a house under contract and Seller has medical & credit card liens against the property. Can someone help break down the steps as to confirming the all of the liens against the properties 

Also when i call to negotiate these liens, does the seller need to be on the phone or can I get a power of attorney notice and do this.

I know the liens in second position on a preforclosure property can be handled, Im just unsure of the steps needed and who I need to call for each of these liens.

You can have a title company perform a search for a nominal fee.  If you do buy with a warranty deed as mentioned above, a title abstract search is included as a component of the title binder.

[Tom Gimer]

Despite what your fact pattern suggests, there is no equity in this property. Further, some of the junior lienholders may be paid from the proceeds of a foreclosure sale, so they are unlikely to budge even if you had valid authority to negotiate on behalf of the owner. That function is typically reserved to attorneys or real estate agents who specialize in short sales... but the latter are really close to the edge of practicing law without a license.

IMO, it would make more sense just to bid at the auction.

[Wayne Brooks]

@Nick D. I don’t see any hope of negotiating these liens down…that typically is only achieved through  a short sale process, with the property selling at market value, and even then, still tough.

[Minna Reid]

In CT you can pull up almost every towns property history online and view the liens. The seller would need to give you a third party authorization to speak with the lienholders. Medical is not too bad, but the credit card lienholders can be very nasty. You may be able to get a partial release from some - they release from the property but retain their right to pursue the owner. 

However, even with just a 260k mortgage, if the house needs 75k of work these numbers don't look worthwhile, even before the liens. Also 260 - is that the mortgage balance or the payoff amount? 45 missed payments will equal some pretty hefty back due interest and fees etc. Ive found that 90% of the time when people talk about mortgage balances they have not actually pulled a payoff statement and are shocked to see how much greater that amount is.