Originally posted by @Nick M.:
Hi All,
I'm purchasing a New Jersey quad at a short sale cash price of $255K. The seller owes the bank circa $280K. We went into contract in March 2016, with an inspection shortly thereafter. Few weeks ago I learned the short sale was approved- yea! Well, the excitement has been some what short lived. Recently after running title I've come to learn of 3 judgement liens: 2 from the DMV from 19 years ago, each for about $800. No biggie. The last from 13 years ago is for $25K (abstract also says "plus costs" - not sure what that means). This judgement comes after losing or perhaps not contesting a lawsuit from a corporate entity. Note: It is unclear if any of these judgements are truly against the seller because he has somewhat of a common name.
The results from the title search were sent to the seller's attorney about 8 days ago with a request to sign an affidavit of title, stating the judgements aren't against him (but someone with a similar name). To date, I haven't heard back from the seller's attorney. I'm imagining at this point, the seller won't sign the affidavit because in part or in whole, the judgments are truly against him. Note: Bank's approval of short sale expires September 12th, 2016.
Question: What can I expect now? What options do I have? Will the bank who is the first lien holder negotiate with the owners of these other judgements (junior leans)? Will they do so by September 12th? Should my attorney and I reach out to the judgement owners and negotiate directly? What can I do to secure the property while minimizing my out of pocket expenses for paying off leans.
Thanks so much for your feedback.
Hi Nabeel,
If the judgments are before the mortgage then they do not apply. There is something called "after acquired title" meaning a judgment placed on the seller before purchasing the property can not be alien against the property they are trying to sell. Judgments are good for 20 years in New Jersey. More than likely if the seller has their drivers license, this is not them. Attorneys are very slow to respond sometimes. Do you have whoever is processing the short sales contact information? If not, do you have the listing agent's info. Are you a cash buyer? If not, you are running out of time. I would stay on top of them. Call often for updates. The foreclosure complaint might just name the lien holder because they have a potential interest in the property, you can't use that to confirm.
There are several options for getting the lien removed if it is against the seller, but again the attorney needs to move. They could move it to a different property, settle it, get a lien release, etc. You can request an approval letter extension, but it is never guaranteed. If you really want the property, you could offer to contribute to the liens. Often sellers in these situations don't have the funds for judgments, water/sewer, etc.
Side note: Find a title company in NJ that will pull title for you in thebeginning without charging you if it doesn't close. That is what I do and it saves a lot of time/headache.
Let me know if you need any more help. I have been negotiating short sales for a long time :)
Good Luck!
Amanda
