The Expert Podcast

We're seeing this more and more with vehicles, real estate, and even lawsuit judgments, where an old debt, an old lien is popping up years in the future. It may have been a lien that was supposedly refinanced or maybe adjusted. It may be something that's supposed to be waived or even erased. Sometimes these loans had written loan modifications, but what's happening is now that the economy is better and inflation has raised up people's salaries, a lot of creditors and credit agencies are now chasing down old loans. They call them zombie loans because they were supposed to be dead, but now they're coming back to life.

Here's an article about a woman in California who had a mortgage on her property that was supposedly mortgage modified, cleared, and released, but now it's coming back. The reason this happens is because the loan or lien or record was never removed from the official records. For example, on a vehicle title, there's a place for a lien, and if you have a lien that is charged off, a write-off, or cleared, unless the Department of Motor Vehicles updates the official title record to show that that lien is no longer valid, it doesn't matter if you paid it or if it's a charge-off. The government still has it down in their system as valid. They don't know that it was a charge-off; they don't know you paid it until the creditor tells them. The same thing with a zombie mortgage: you could pay it off, it could be adjusted, it could be cleared, or it could be released by statute. Until there's a document that clears it from the official land records, the government records, it didn't really happen yet.

So what you want to do is, anytime you have a prior loan or lien or judgment, even in court, you want to file for a lien release or release of mortgage and get that filed in the record so that it clears it off of anything official someone could look at. How do you do that? Well, you can check out our website below, lienrelease.com. It will give you instructions, but basically, what you want to do is prepare an official lien release package and send it by mail. Don’t do email, phone, Facebook, or any electronic means. You want to send it in an envelope printed to the actual lien holder and only send it to the lien holder as it's listed in the records. Don’t send it to a collection agency or someone who bought them out or any other affiliate. Send it only to the name and address on the official lien.

You might say, "Well, that company's out of business, that company’s gone." Doesn’t matter. You want to send it there, send it to their registered agent and see what happens. If it’s not released, then what you do is file it as a court order petition to have the court release it. Again, we’re not attorneys; we’re not giving you legal advice, but it’s very important to follow those procedures to have the record officially updated because until it’s updated, as far as anybody knows, it’s still a valid lien, mortgage, or judgment. You want to take those steps because if not, it could come back to haunt you, like this woman here, who all of a sudden had somebody coming back trying to collect money from her.

In fact, the article says right here she had never heard of Statebridge Company until January, when she received a letter stating she owed them $180,000 and needed to make an initial payment of $50,000 or lose the house—an old second mortgage she paid off years ago. That's what happened, and it could be a car loan that’s a charge-off, a car loan you paid off, an auto lease, or a judgment that’s expired from a court case. You want to get it documented because until the official record is updated, it’s still valid. Even though you might say, “Well, I paid the bank, I paid the lien, or it’s a charge-off,” that doesn’t necessarily get to the government record. That’s just between you and the bank.

For example, when you pay off a car, you pay that last payment, the bank gets the last payment. Normally, what they do is take the title they have in their drawer, the title certificate, sign it as paid, and mail it to you. But they don’t update their government records. The reason they don’t is because it costs money. It costs money to file it; it costs money to prepare it. So they figure they’ll save some money and just send you the title mortgage release. They figure, “Well, they paid off their mortgage or it’s a charge-off or it’s a modification. We’ll just send the information to the borrower but we won’t update the title records because that costs money too.” That could cost $150 or $200 for what’s called a bringdown or an update. If they have to do that thousands of times every month, that could be a quarter million dollars a month, many millions of dollars a year. They figure they’ll save some money by not filing in the official records, but now it could be 10 years later and it could come back to haunt you.

So get these lien releases. At least request them. If the lien holder doesn’t respond or they don’t handle it the right way, then you can take the next step with the magistrate. But get more information on our website, lienrelease.com. If you want to do a consultation with a lien release agent, you can do that as well using the link.

Thank you for watching another episode of Actual Human Advisory on Describe TV. Remember, we have live one-on-one consultation appointments available at actualhuman.com, where you can book a one-on-one, undivided attention live call with a licensed investigator, a licensed insurance broker, a licensed mortgage broker, real estate broker. I’m also a certified real estate title examiner, a certified civil court mediator, and have developed and started over 15 businesses, several of which were sold for millions of dollars. So if you do have questions in any of those categories, you can arrange a one-on-one live video consultation. Use the link below, and we’ll see you on the next video.