Ooopsie, This Contractor Has Filed for Foreclosure!

By
Services for Real Estate Pros with Fidelity National Title 540-EA-52017

What happens when Contractors who have Mechanics Liens, file for Foreclosure?

I recently had a property in escrow that had a number of Labor and/or Material Liens filed on title.  The seller was working with the contractors to negotiate the payoffs, but I noticed that one of the contractors filed a Foreclosure Action.

Title explained to me that if the Lien is 9 months old, they drop off title, UNLESS  the Contractor files for Foreclosure.  In that case title "stays" all Liens, regardless of age and they have to either be paid off or bonded over to close.

As it turned out on this property, the Lien in question "expired" one month prior to the Contractor filing for Foreclosure and so title did take it out and we closed.

Thanks for reading!

Julie

 

Comments (1)

Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ouch that could have been an expensive situation, getting another binder on top...Endre

Mar 09, 2015 09:32 AM