Any real estate pro's or real estate lawyer pro's in here??

[hartmanap]

Hope someone can help me. We are in the process of building a home. Everything is finalized and we were supposed to close on our construction loan Friday morning. The bank called me today and said that during the title search they found a lien placed on the land.

The land, (6.2 acres) was gifted to us by my wife's mother who still lives in a house resting on another 4 acres. Back in 2002 she took out a $15,000 equity line of credit in which she still owes $11,500 on. Well this showed up on the title search and now my bank won't budge until the lien is satisfied.

Does anyone know if her bank (BOA) may possibly release the lien on our 6 acres that we just subdivided and keep it on her 4 acres and home? Or am I gonna have to pay off her ELOC prior to closing?

Any help would be appreciated!!

 

[hartmanap]

Just to add, this is a Home Equity Line of Credit with a draw period that is still in force. The line was 15k and she has a balance of 11500 left.

 

[VIPER]

you are stuck till she pays it off. Delt with the same thing with my folks place.

 

[hartmanap]

Well there goes my savings!!

 

[lil charlie]

It depends on when the land was subdivided and if the loan was based on the entire 10 acres or not. It sounds like the loan was based off the entire land package (prior to subdivision) and if that is the case the loan will need to be paid off and closed out. It’s a line of credit so if you pay it off but don’t close it out there is nothing stopping her from spending that 15K again and keeping that lien on the property. The bank will most like want to close out the loan once it finds out that the land was divided. The real question is was the subdivision legal? That bank has “rights” to that land and I don’t think it can be divided or sold until the lien is removed.

 

[kromdom]

Does anyone know if her bank (BOA) may possibly release the lien on our 6 acres that we just subdivided and keep it on her 4 acres and home? Or am I gonna have to pay off her ELOC prior to closing?

Curious if you have asked BoA directly and what they said?

 

[Professor]

Curious if you have asked BoA directly and what they said?

You won't be able to find anyone at BoA with a clue and the ability to do anything about it.

Your best bet is to pay it off, close on the transfer. Hopefully her credit will allow her to open a new one to pay you the $11.5 back

 

[skydivr]

If you want clear title, you are gonna have to get the line paid and closed.....then, if she wants it loaned to her again, it will have to be on her subdivided portion. BoA isn't gonna budge you can count on it when they hold ALL the cards.

 

[Johnny Bravo]

Depending on the appraised value of her remaining 4 acres, you could argue that BOA is still sufficiently collateralized and ask them to give you a Partial Deed of Release. They would release only your 6 acres from the legal description which is encumbered by the lien. Essentially, you're having them remove your legal description from their Deed of Trust. They still have a security interest in the 4 acres, which should be plenty on a measly $11,500 loan. That would give you free and clear title without having to pay anything off. And it wouldn't matter if she dipped into the HELOC again for more money, because your land won't be part of the collateral for the loan.

 

[Professor]

Depending on the appraised value of her remaining 4 acres, you could argue that BOA is still sufficiently collateralized and ask them to give you a Partial Deed of Release. They would release only your 6 acres from the legal description which is encumbered by the lien. Essentially, you're having them remove your legal description from their Deed of Trust. They still have a security interest in the 4 acres, which should be plenty on a measly $11,500 loan. That would give you free and clear title without having to pay anything off. And it wouldn't matter if she dipped into the HELOC again for more money, because your land won't be part of the collateral for the loan.

Which should not be a problem if they were working with a credit union or local bank. You have about 2-5% of a chance doing that with Bank of America. Even if you are successful, it would take several months. He is trying to close on a construction loan this week.

 

[skydivr]

Depending on the appraised value of her remaining 4 acres, you could argue that BOA is still sufficiently collateralized and ask them to give you a Partial Deed of Release. They would release only your 6 acres from the legal description which is encumbered by the lien. Essentially, you're having them remove your legal description from their Deed of Trust. They still have a security interest in the 4 acres, which should be plenty on a measly $11,500 loan. That would give you free and clear title without having to pay anything off. And it wouldn't matter if she dipped into the HELOC again for more money, because your land won't be part of the collateral for the loan.

Not gonna happen in the time he needs to get this closed...he's stuck. Better to pay it off, if she wants to try and re-borrow, she COULD give the money back...

 

[Wag]

Which should not be a problem if they were working with a credit union or local bank. You have about 2-5% of a chance doing that with Bank of America. Even if you are successful, it would take several months. He is trying to close on a construction loan this week.

It won't hurt to ask. Sometimes, you get the right guy on the phone at the bank and lo and behold, you're gold.

Nevertheless, faster to pay it off and get the L.O.C. closed out. Even that could take a couple of weeks to get the paperwork done and filed with the recorder's office.

Good luck, regardless.

--Wag--

 

[Amode]

The lien has to be setteled. One way is to bond around it. Which means buy a bond untill you get it setteled. Either way you have to pay the lien, But a bond will let you get started so you can have time to pay the lien off.


Chuck