All Forum Posts by: Kit Jackson

Quote from @Jacob Sherman:

Would have to call and order an official payoff from the lender 

 After detective work I now found who has the loan/lien on my house.

ReadyCap Lending.    This is an email I just received from their rep:

"

The initial appraisal cost would be paid by ReadyCap but the expense would be taken from any from the sale/refinance and settlement to release the lien.

The plan would be to determine the amount of equity based on the updated appraisal and first lien and then negotiate a settlement with you for the release of the lien. Just quickly based on the amount of the first and a quick check of Zillow there could be a substantial amount of equity in the real estate. If that is the case, we would have to discuss your offer and the remaining principal balance on the loan. If we could not agree on a number, then a foreclosure would have to be started. Again, first we determine the amount of equity."

Can you break that down to me like I'm in 6th grade what the rep means?  If they're in 2nd position and even if there's substantial equity how could they move into any type of foreclosure??

Brief history. Back in 2007 I took out a loan with CIT that was backed by the SBA. It was in

my LLC name but I personally guaranteed it foolishly using my house as collateral. Fast

forward to today and I have enough equity to pay the lien off. However on a Title Search

I did in 2020 it shows the lien in 2nd position to CIT Small Business Lending.  I did speak

to the Treasury Offset division who stated I did have one SBA backed loan for a much lower

amount than the lien.  That of course makes a difference in equity so how can I find out what

I actually owe?

Quote from @Kit Jackson:

Quote from @Bill B.:

It does if you don’t need the money just the credit. But if you don’t need the cash then just do a no cash out refi. It will pay off the lien and the first mortgage and the rate will be cheaper than a cash out refi. Then you can get a heloc if you want as there will only be one mortgage in front of them. The same loan Officer might be able to set up both at the same time. 

If your 1st mortgage has a rate less than 5% then you could also try to leave it alone and get a heloc that will pay off the lien as I doubt they want to be in third position. 

 Thanks!    My current first mortgage is at 3.5%.  

Also the lien in 2nd position is to CIT for $200K.  It was a loan backed by the SBA.  Does anyone know if I could offer a OIC to them for much less and have the lien removed?   Could I do a cash out and have cash to offer said OIC? Or do I have to pay the lien off in full in order to obtain cash to offer them a OIC? 

Quote from @Bill B.:

It does if you don’t need the money just the credit. But if you don’t need the cash then just do a no cash out refi. It will pay off the lien and the first mortgage and the rate will be cheaper than a cash out refi. Then you can get a heloc if you want as there will only be one mortgage in front of them. The same loan Officer might be able to set up both at the same time. 

If your 1st mortgage has a rate less than 5% then you could also try to leave it alone and get a heloc that will pay off the lien as I doubt they want to be in third position. 

 Thanks!    My current first mortgage is at 3.5%.   

Quote from @Bill B.:

Couple of thoughts:

I don’t think the lien will just “drop off”. Unless they forget to renew/refresh it to give themselves another 10+ years. 

Is there any equity left after the lien? (this will obviously affect how much you can borrow.)

Could you get a heloc where they use part of the proceeds to pay off the lien so that they would be in their usual 2nd position?

How about standard cash out refi where where they pay off the first mortgage and the lien and then you take cash on top of that?

 There is some equity after the first mortgage and the lien. 

"Could you get a heloc where they use part of the proceeds to pay off the lien so that they

would be in their usual 2nd position."      I'm actually in the process of discussing with the bank to see if we can do just that.

The standard cash refi does sound like a good idea. If they pay off the first mortgage and the lien and I take any cash left over I'm concerned that's going to be a hefty mortgage payment and higher balance.   Didn't know if a heloc was better as it works as a line of credit?

Quote from @Peter Walther:

Quote from @Kit Jackson:

Quote from @Peter Walther:

I'm finding your post a little confusing.  As I understand it, the Small Business Administration (SBA) doesn't loan money, it partially guarantees a loan from an approved lender to a qualified borrower, so the money is owed to a lender, not the SBA.  It also takes a personal guarantee from the borrower.  Generally, the lender's lien is secured by a mortgage or a deed of trust.  If so, why does you attorney think it will just fall away?

 Thank you for your response. This was a SBA backed loan from CIT.  I can't remember the exact reason the attorney told me it would fall off. It is a deed of trust and attached to my house.  

This was what the attorney emailed me:

"The maturity date is the sate stated in the recorded document for the last payment on the loan. The +15 is my notation for when the lien might potentially expire, but these are items I'm happy to discuss with you in further detail."

In my experience, most states have a statute of limitations for the enforcement of a mortgage lien.  For example, in Florida, a mortgage is no longer a lien on real property 5 years from the date of maturity, if the date can be ascertained from the face of the mortgage or 20 years from its recording if it can't.

In any case, I suspect you'll probably need to pay the lien off and obtain and record a release of the CIT DOT if you want to get a new loan.

 Thanks for the response and help.   The notation on the Title search from the attorney says 2018+15 years.  If I understood correctly that is the time it will "fall off".   I did speak to the bank today and there is a glimmer of hope I can refi and pay off the first mortgage and this lien since I do have a decent amount of equity.

Quote from @Peter Walther:

I'm finding your post a little confusing.  As I understand it, the Small Business Administration (SBA) doesn't loan money, it partially guarantees a loan from an approved lender to a qualified borrower, so the money is owed to a lender, not the SBA.  It also takes a personal guarantee from the borrower.  Generally, the lender's lien is secured by a mortgage or a deed of trust.  If so, why does you attorney think it will just fall away?

 Thank you for your response. This was a SBA backed loan from CIT.  I can't remember the exact reason the attorney told me it would fall off. It is a deed of trust and attached to my house.  

This was what the attorney emailed me:

"The maturity date is the sate stated in the recorded document for the last payment on the loan. The +15 is my notation for when the lien might potentially expire, but these are items I'm happy to discuss with you in further detail."

Quote from @Erik Estrada:

Quote from @Kit Jackson:

Quote from @Erik Estrada:

Quote from @Kit Jackson:

Maybe a dumb question but what the heck. My primary home has a first mortgage but the SBA has a lien on my home and in 2nd position. This lien will fall off in 9 years according to an attorney but I don't want to wait that long. I have a good amount of equity and was wondering if it is at all possible to get either a HELOC or cash out in someway to possibly offer a OIC to the SBA and get it off my house. This would put a new loan in 3rd position until I get rid of the lien currently in 2nd. Is that possible?

Having a 3rd position lender is very unlikely. You will either need to payoff the second via a HELOC or second mortgage or refinance the entire note (both 1st and second)

So could I get a HELOC even with this lien in 2nd position? If I could get a HELOC I'm hoping I could offer a OIC on the lien.

Yes you can, but the HELOC will need to payoff the current second at closing.

 Great!  I appreciate it.

Quote from @Erik Estrada:

Quote from @Kit Jackson:

Maybe a dumb question but what the heck. My primary home has a first mortgage but the SBA has a lien on my home and in 2nd position. This lien will fall off in 9 years according to an attorney but I don't want to wait that long. I have a good amount of equity and was wondering if it is at all possible to get either a HELOC or cash out in someway to possibly offer a OIC to the SBA and get it off my house. This would put a new loan in 3rd position until I get rid of the lien currently in 2nd. Is that possible?

Having a 3rd position lender is very unlikely. You will either need to payoff the second via a HELOC or second mortgage or refinance the entire note (both 1st and second)

So could I get a HELOC even with this lien in 2nd position? If I could get a HELOC I'm hoping I could offer a OIC on the lien.

Quote from @Bill B.:

Couple of thoughts:

I don’t think the lien will just “drop off”. Unless they forget to renew/refresh it to give themselves another 10+ years. 

Is there any equity left after the lien? (this will obviously affect how much you can borrow.)

Could you get a heloc where they use part of the proceeds to pay off the lien so that they would be in their usual 2nd position?

How about standard cash out refi where where they pay off the first mortgage and the lien and then you take cash on top of that?

 Thank you so much for responding.  From what the attorney said after speaking with the title insurance company the lien was put on in 2018 + 15 years. I'm not sure I completely understand.

  There is equity after the lien and the 1st mortgage.

Your third question is a good one as that's what I'm trying to find out. :)  Not sure who exactly to speak to regarding that.     I'd like to get a cash out where I could at least offer the 2nd lien a OIC to remove it if possible.