The family member was unaware the lien existed.

Hmmm. You havent closed yet, right?

Make sure there arent others. If you want the land it will cost you 16k.

Not yet, closing date about 2 weeks out. Loan was for 450k so I dont want to throw it away over 16k. Hopefully I can settle for a reasonable amount. Or they can get zero

Determine if the lien is legitimate.

Per the attorney who did the title search it is. It was a civil judgement

I’ll admit I’m not always the sharpest tool in the shed, but I don’t see how you could expect to settle for anything other than $16,000. What leverage would you have to settle for less? You said the owner was unaware of the lien but I don’t think ignorance is an acceptable defense.

I did not see that the OP mentioned that it was a lien against his mom. Wonder where you got that from HU-469669671.

HU-469669671 thats weird because the property was deeded to me & recorded with the county, so I would think that means it's mine. Albeit with a lien on it

Apparently some states will allow a lien to be placed with nothing other than someone going to court and stating that they are owed money. Will not get into details but I worked for USDA and we were warned warned that it could happen. The lien holder only had to show a copy of where a request for payment was sent to receive a judgement.

Beyond that find out when the lien was made and what it was for if listed. The title company should be able to tell you this. You mother may be telling the truth if it happened years ago. You do not mention your father so it may have happened while he was there and he never told her.

It will hold up closing then contact whoever or whatever placed the lien to see if you can settle with them for less than the lien.

First, I'd take the lien info and get a record of the civil judgement. Whoever it's against may want to challenge it. Improper service of notice of the original action is one possibility.

To give any real advice I would want more details, but I would definitely advise consulting an attorney.

Generally speaking, I think there is little harm in trying to obtain a lien release.

Once the creditor learns you are not the original owner, and their debtor, they may release it automatically. These things are rarely worth the fight after transferred.

If you offer to purchase a lien release, it is a double edged sword for creditors, on one hand they have you over a barrel, but on the other hand lien releases are not payment of the debt just a release of securing property. So long as the remaining property is sufficient to secure, it is pure profit for them. In other words, they can sell you a release for $6,000 and still collect the original $16,000 from the debtor.

They also may be willing to settle the original debt for less because it comes without a fight.

Personally I would be prepared to pay the full amount but try to pay less.

Not all liens are equal although this one sounds like a debt. I am currently waiting for a release from the city for a demolition lien. The property was inspected after the house was torn down by the owner but the lien was not released. I was told by the title company that a new inspection had to be done and there were just not enough inspectors available. Best estimate for closing is now several months from now and not on Tuesday. Just paying is not an option as inspection would still need to be made. The owner relied on she was told the steps were. We both want this over and done with.

I see - @User, not on this dilemma but it was mentioned on another:

If it’s okay to you, pay it off but make sure there are no other surprises before doing so. Some gift.

Lawyer up!

A guy has a 16K lien in one hand and an offer to settle for half that in the other.

What do you think he's gonna take?

“thats weird because the property was deeded to me & recorded with the county, so I would think that means it's mine. Albeit with a lien on it”

you need an attorney, start with whoever prepared the deed and handled the transfer. Ask them why the lien escaped notice when the property was transferred?

lien searches were a regular part of construction loans from the beginning of the process when I was in banking so I am surprised the bank is just now telling you this so late in the game.

Depending on the type of lien, the lien holder may hold all the cards if they are in first position and the bank is in second position.

talked to my attorney and reached out to another. both said deal with the creditor directly which I did. They are willing to settle but for more than I would like to pay but whatevs

Sounds like they came down a bit? Be glad they didn't demand the whole $16K. If I held a valid lien for a particular amount, I have a hard time seeing why I would settle for less, especially when I had leverage from a real estate deal twisting in the wind.

You will need to satisfy the lien by paying the amount. Get a release of lien from the lien holder at the time of payment. This can be filed at the courthouse. Then, you need to get a quit claim deed from your mother. This will assign all the property interests to you. Last, you need to do a title search and lien search to prove that there is nothing else outstanding.

If that sounds complicated, it is if you have never done it before. But, it's not difficult once the lien is paid off. I strongly suggest that you let the attorney do this for you so that it is done swiftly and correctly the first time.

It will delay your closing. But these things will need to be completed before you can proceed. I am surprised that the lender hadn't run a title and lien check before they loaned money.

"They are willing to settle but for more than I would like to pay but whatevs"

One of the problems dealing with creditors is that they come in varying degrees of sophistication.

You should attempt to buy a lien release rather than settle the debt. If the creditor is knowledgeable and experienced they will sell you the lien release cheaper than settlement of the debt. Again, that is because they maintain the right to collect the full amount from the debtor.

Alternately, you can offer to buy the debt rather than settle or satisfy it, this transfers the lien to you. If the property was subdivided, this means that when the debtor sells the balance of the property they will have to pay you. That is a pretty sketchy thing to do to someone who gifted you property, but I really don't know the details, so...

Either of the above options are going to require a somewhat sophisticated creditor. A mom and pop place simply may not be familiar with other options.

Thx everyone. Lien removed, closing scheduled!

One last item. When you close, buy and pay for title insurance that covers your interests.

Yes, title insurance is an important component in the mix. Please talk to the title company so you understand fully what is covered under the policy.