Clearing the Slate: How to Get Rid of Old Liens
Download MP3What is a Zombie Mortgage?
- A zombie mortgage is a loan placed on a property many years ago (e.g., 15-20 years).
- It often arises from a mortgage that was foreclosed, charged off, renegotiated, or adjusted.
- The problem occurs when a lien release is never filed in the property records, even if the mortgage was paid off or cleared.
Impact on Borrowers and the Real Estate Market
- Without a lien release, the property remains encumbered and cannot be sold or refinanced.
- Debt collectors can later claim there's still a mortgage on the property and attempt to collect the debt, often with added interest, penalties, and fees.
Other Types of Zombie Debt
- It’s not just mortgages—car loans, title loans, and even lawsuit judgments can resurface.
- Any old loan with a recorded lien can reappear, causing problems for property owners.
How to Deal with Zombie Mortgages
- Getting a Lien Release:
- The original lender or creditor must issue the lien release.
- This process should be handled via postal mail, not by phone, email, or any electronic means.
- Prepare a package of documents, including the lien release form, letter of non-interest, affidavit of facts, and declaration.
- Include a return envelope to make it easy for the creditor to send the signed documents back.
- Multiple Locations:
- Send the package to multiple office addresses of the creditor to increase your chances of getting a response.
- Original Creditor Only:
- Only the original creditor whose name is on the record can sign the lien release.
- If the loan was assigned to another company, they cannot sign unless you have all the assignment documents.
Key Takeaways
- Always request the lien release in writing.
- Send your request to multiple locations.
- Include a return envelope to facilitate the process.
Additional Resources
- Consider consulting with a title agent or investigator for assistance.
- For more insight, check out other videos on our channel.
Need Help?
- If you have further questions or need assistance with the documentation process, click the link below for a consultation.
Conclusion
- Clearing zombie mortgages and liens is crucial for property transactions.
- Act now to avoid complications in the future.
