Can I Still Foreclose After Being Sold With an Unpaid Lein???

5 Replies

I invested with my traditional IRA account as two different promissory notes for the same borrower on two different flips. One promissory note for one property and one for the other. Unfortunately about 1.5-2 years ago they have not been paid (way past the maturity date) and the borrower says "they will pay" and nothing has happened so far. The plan is to foreclose and regain them as assets into my IRA then up to me to do what I want with both properties (in a picture perfect world)

Title company sold the property too while the liens were not paid. How does that even work??? Aren't liens intact so the borrowers can't sell a house until the liens have been paid off?

Long story, short can I foreclose on both properties after 1.5-2 years after they were sold with a pre-existing unpaid lien (with a recorded deed of trust) when there's already new owners living in them???

Your help is GREATLY APPRECIATED!

Originally posted by @Alex T. :

I invested with my traditional IRA account as two different promissory notes for the same borrower on two different flips. One promissory note for one property and one for the other. Unfortunately about 1.5-2 years ago they have not been paid (way past the maturity date) and the borrower says "they will pay" and nothing has happened so far. The plan is to foreclose and regain them as assets into my IRA then up to me to do what I want with both properties (in a picture perfect world)

Title company sold the property too while the liens were not paid. How does that even work??? Aren't liens intact so the borrowers can't sell a house until the liens have been paid off?

Long story, short can I foreclose on both properties after 1.5-2 years after they were sold with a pre-existing unpaid lien (with a recorded deed of trust) when there's already new owners living in them???

Your help is GREATLY APPRECIATED!

In some states when a property is sold at auction liens are wiped out. I don't know the law in Texas but you should hire, not just chat, but hire @Jerel Ehlert as an attorney in Texas to help you sort through this. It sounds pretty serious.

 

Sounds like no deed of trust/mortgage was recorded to secure either note... or perhaps the liens weren't perfected. If that's the case, there is nothing to foreclose. 

If there is/are valid and recorded security instruments then sure, foreclose... if it makes sense. You didn't indicate what lien position you think you are in.

After reading through your post a couple of times, it appears that you just have a promissory note instead of a lien.  A Promissory note is unsecured debt so there is no ability to foreclose.  You could try to get a judgement against the borrower and attempt to collect any exempt property that person may have

NEVER EVER LEND MONEY ON REAL ESTATE WITH A PROMISSORY NOTE.  Always insist on a Note and Deed of Trust in Texas