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does anyone have advise on Lis Pendens liens

My son is trying to purchasing a home in a short sale. The bid was placed back in June, our real estate agent tried contacting the short sales negotiator several times always being put off with no information. On November 2nd in the late afternoon she received a message that the bid was accepted but we would need to close by November 12th or the house would go up for auction. Our real-estate lawyer filed to have the auction stopped on the 9th. The paper work was faxed to the law firm handling the auction before closing for the holiday weekend . We received an extension and all the loan processing , inspection and appraisal came in great. This week we receive a call that they did not stop the auction and the man that "bought" the home is telling our lawyer that he needs to drop the filing and he will resell my son the home at the same price so that he can make his quick money or he will tie up the property for years with a lis pendens lien. I feel that this was handled so poorly from the negotiator down. Can we do anything.
  • November 29 2012 - Johnston
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Answers (4)

I'm wondering if the information that is filtering down to you is accurate? "Lis Pendens" means "pending legal action or a formal notice of one", it's not actually a lien; a lien comes about when a party has a claim to a property, i.e. an open line of credit, a second mortgage or perhaps a contractors lien... all of these indicate money owed to someone. It seems a highly improbable chance that the property owner would file a lien against his own property. If he can find a circumstance to file a claim against himself and manages it legally, it clouds his title and he can't sell the home unless he clears the lien. 

Nevertheless, the long and short appears to be that someone else purchased the home your son wanted. Have you had someone check to discover whether or not the deed has been recorded? If so, then this other individual certainly owns the property, and, if your son still wants it, he'll have to make him an offer and negotiate the purchase. Double check with your attorney or have your real estate broker do a title search, that's the quickest way to determine the chain of title and the recordation of deeds. 
  • November 30 2012
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Profile picture for pvhomes
Make the new owner a good written offer with a quick close date.
  • November 30 2012
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Profile picture for Ofe Polack
The purchase of short sale properties is such a nightmare!!!  Indeed foreclosures can be postponed by the seller/lender if there is an offer on the property.  Sometimes the lender through the law firm that will be doing the auction postpones it and some other times they carry on and have the auction, even though the property sells for less than the offer.  I think that is this case in point, the lender did not stop the foreclosure and sold it for less (I know, I know it does not make sense, but that is what is taking place nowadays).  Now the person who bought it for less, sells to your son for whatever he would have paid the bank, and he is the one making the profit, not the bank.  If your son really wants the property, he could buy it from this person, if it is proved that he is the owner.  If your son gets emotional and does not want to be blackmailed (and I use the word loosely) he can move on and find a regular sale which is a lot easier to transact, but if he really, really loves the property, then he can go on and purchase it and everybody is happy.  Since you already have an attorney looking and things, he should be able to advise you better than we can without being 100% aware of the circumstances. Live and learn, chuck to experience!
  • November 30 2012
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If the scenario you have described is accurate, there's probably nothing you can do as the previous owners would no longer have possession of the home and therefore couldn't sell the home.

Your attorney could only have requested that the auction be postponed. It would be up to the lender and their attorneys to postpone the auction. If they missed a deadline to postpone, failed to properly file the paperwork or decided not to postpone the auction, then that is their right as the lien holder.

Is your attorney absolutely sure that the person that purports to now own the property really did purchase the property at auction? And is he now the legal owner? Frankly it might be easier at this stage to purchase the home from him - assuming he's the legal owner. Otherwise your son should just walk away from this situation.
  • November 29 2012
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