Stuck with a Home Lien

8 years ago

Hello,

I am a first time home buyer. I purchased my home in Fall 2016. A year later I was in for a rude awakening when I discovered a $2000 extra charge on my tax bill to cover an energy loan which was a lien on the home taken out in property taxes. It turned out there was an $8,000 lien on the property. I went through my contracts and after talking to my realtor, trying to get a hold of my bank loan officer, talking to the title company, and finally my escrow agent... I am still kind of stalled and need advice on what to do. At first I went with my realtor who directed me to someone who advised me to go after the title company.

Should I blame the title company and try to collect on title insurance? The preliminary statement from title had a number on it which was a reference to the lien. They didn't say outright there was a lien on the property but they identified the county number that I could pay $40 to get a report that said there was a lien. I am kind of leaning on the idea that my realtor, as kind as I am and as much as I cannot get myself to go after, kind of was at fault for not making it known to me that there was this huge lien he would have seen if he had taken time to look at the preliminary statement. My loan officer who doesn't respond to any inquiries doesn't help.

I just don't know what to do from here... is there a way to file a complaint to some governing agency? I don't even know how I would try to collect title insurance and I don't know who to complain to. I'm kind of just at the point of quitting but I feel like this shouldn't be a thing for a first time home buyer/active duty military person. I was hasty to get in the house during a PCS move and buying was new to me. Can I hold anyone accountable? And of course the sellers took liberties in the disclosures on the property I got stuck with a leaky home and a leaky garage, and more.

Featured Answer

homechef59

8 years ago

last modified: 8 years ago

Your realtor is not at fault. The title search was deficient. That's why you pay for a title search in the first place, to ascertain whether there is a clear title to transfer.

The closing attorney should have stopped the proceedings until the title was cleared. I've had that happen to me personally. It can take a few days, or in my case, it took a couple of months to clear the title.

Potential parties at fault, the title company, the closing attorney. The victims, you and your lender.

If you are military, you need to consult with your unit's JAG officer. You do have some special protections against fraud afforded you by virtue of military service that others do not enjoy. If you are already separated, you will need to consult a real estate attorney.

You may even have some coverage in your homeowner's insurance policy. That's worth checking into, also.

What most people don't understand is the title insurance protects the lender. Unless you specifically purchased additional insurance, the purchaser is not protected. Even then, it may not be covered if you buy extra insurance if the adverse condition is made known to you prior to closing. I buy it when I purchase property, even then, it won't protect you.

The loan should have never closed with an outstanding lien.

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Comments (10)

PRO
Anglophilia
8 years ago
Are you saying that you KNEW that you were not getting a "clear title" on this property when you bought it? You should have paid the $40 and found out about the lien. I think you're stuck for this.
User
8 years ago
You knew there was a lien? But you didn't know how much so you bought the place anyway?

Read your title insurance policy or get a real estate attorney to read it for you.

Good luck.
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functionthenlook
8 years ago
last modified: 8 years ago
I am surprised that the bank gave you a loan with a lien on the property. This sounds like the title companies blunder for not doing its job. It is their job to find out if there is any liens on the property, not yours. This is why people go through the professionals in the first place. The average home buyer don't know all the legal ins and outs of home buying. I would contact the title company.

Those home disclosures are a joke. The buyer has to prove that the seller knew of the problem. The time and money it takes in court, it is usually cheaper to fix it yourself.
Denita
8 years ago
I agree with functionthenlook. The title co didn't do their job. I can't believe they didn't pay the $40 in the lien search to show you the lien and then pass that expense on to you at closing.

Get a real estate attorney and at least have a consult with him/her to see what you have in the way of remedies now. I would think that there are at least two responsible parties, seller and title co, but I'm not an attorney so I don't know. I do know you want to tackle this right away. Don't let this lien sit and continue to accrue interest.
User
8 years ago
Although the lien was probably there given the notation about the cost of looking up a lien check to see when the lien was filed. On or about the time the closing took effect it might not have been discovered in the title search. If after, did you receive any mailings from the company that filed the lien? This should have been taken care of at closing or before by seller but the question of when the lien was filed is one that if you go to an attorney will be one of the first questions asked. A call to the register of deeds or whatever it is called in your area or a look on line may give you this information vs extra attorney fees.
ncrealestateguy
8 years ago
Yup, your closing attorney and the Title Company are at fault. Schedule a meeting with the attorney that closed the deal, and go from there. There is a time limit from when a lien is issued to when it has to go to court. If the lien holder misses those dates, the lien goes away. At least here in NC.
just_janni
8 years ago
Exactly - this is precisely why I pay my long time attorney to do all my closings. I expect that I am paying him to look out for me! His precloser, his title company, his paralegal, etc - and I expect him to review any "finding" with me.

I'd be requesting some answers.
Laurie Schrader
8 years ago
This is why people get a RE attorney.
lafdr
8 years ago
In my state attorneys are not involved in closings. So that may be the case in the OP's state too. It sounds like a title company issue and I would focus my attentions on them. A written letter might get more response at this point, as well as escalating to a manager or higher ups at the title company,