Our agent found a lien against the old house we are selling!

This is exactly how nightmare scenarios begin. You get your home ready to list on the market and your agent pulls a property search using their in house program and a lien is found. What do you do?

This scared us initially.. Thankfully the lien was only for $6,500 in our case and we could just pay it off if required. I was still not happy about this new bill we found.

Later I remembered that we had purchased title insurance on the house and used a local closing company to close on the house.

I phoned up the closing company and sent them the information about the lien. After a couple of days they got back to me and explained that the lien was in fact a second against the property and not to worry.

If you aren’t sure what a second mortgage is, this is a great time for me to explain!

Basically, when you buy a property, the bank will create what is called a “first mortgage” against the property. After a few years, you may want to get a home equity line of credit or any other loan against your home. This new mortgage will be in second place while the original outstanding mortgage is in first place.

In the case of the home I bought, it was a foreclosure which I purchased using https://hudhomestore.com. The money I paid for the house went to pay to the first mortgage holder and everyone else in line received nothing and their loans go away.

The lawyer informed me (since it is public record in MS) that the first mortgage was actually 65k… They most likely only received around 15k since I bought the property for 18k. The lawyer was floored by the deal I received on the house. I’m definitely not complaining lol!

In the end, they said if we have any problems at closing to give them a call and they will help us resolve it. This is definitely why buying title insurance is a good idea. If I hadn’t they would most likely not be as happy to help.

Thanks for reading and have a wonderful day!!

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