Lis Pendens filing?
What does a Lis Pendens filing mean to a potential buyer? Looking at a building that propertyshark shows a Lis Pendens filing by the seller’s bank in December of ’08. What does this really mean? Is foreclosure eminent? Could it be nothing? How do I find out what’s going on? Thanks.
What does a Lis Pendens filing mean to a potential buyer? Looking at a building that propertyshark shows a Lis Pendens filing by the seller’s bank in December of ’08. What does this really mean? Is foreclosure eminent? Could it be nothing? How do I find out what’s going on? Thanks.
you don’t need a lis pendence on a property where you have a recorded mortgage.
It can be anything from a mechanics lien to almost anything else that CLOUDS TITLE. A lis pendence can’t be used for anything else. The crack about Obama supreme court is frankly just plain dumb and not relevant to you at all. If the seller doesn’t know they dam well better should find out cause no title company will close with this on the title report(as will a mortgage or a judgment against the owner of the property)
there are lots of potential possibilities, but the odds are 80%+ that it’s due to non-payment of mortgage.
You can check how much the mortgage is. If the sale price is less than mortgage, then it will involve additional difficulties.
You won’t see the lis pendens on ACRIS. ACRIS records things for tax purposes, which would not include a lis pendens. Lis pendens attaches to the property by the records kept at the City Registrar (not online). But any open mortgages should be recorded on ACRIS and you should be able to see the original size of the loan (although not the present balance).
Serpentor suggested a good way to proceed. Make your bid but you want to know early whether this will clear easily at closing.
Run the seller’s name through the court system, see if anything turns up (divorce, bankruptcy).
Thanks all – good stuff. One thing not working out for me is the filing shows up on propertyshark but not on ACRIS. So where is propertyshark getting their info from? Yeah, I was hoping the broker would come back with more than, “unable to disclose further”.
If you’re looking at Property Shark (and presumably ACRIS) there should be some details on the Lis Pendens. Not all are mortgage foreclosures, some could be related to a cantankerous divorce proceeding.
If a bank is involved, the total amount owed can very wildly from what is reported in the filings. If they’ve been in default on a mortgage for six months, there accumulated interest, fines and legal fees that the bank will want to recover if this isn’t a short sale.
Your contract will say they’ll deliver free and clear title (it better anyway). Assuming it isn’t a short sale, the bank will provide the seller with a payout letter that details, to the penny, the amount the bank is owed at closing. (That happens whether or not a lis pendens has been filed, actually, that the bank has to tell the seller, to the penny, how much mortgage will be left on May 5, 2009) So you’ll settle the Lis Pendens at closing, not before.
Or, maybe, the payout letter will detail an extra $150K in accumulated interest and legal fees and the seller will become absurdly shady, ask you to participate in extra legal shenanigans like giving them money on the side or otherwise trying to help them defraud the bank and you’ll wind up losing six months of interest on your deposit playing games with them, in addition to the money you may have spent on a lawyer, engineer or mortgage application. Not that I’ve got any experience there.
I don’t think it is at all unreasonable to tell the broker that your offer is contingent upon clarification of the circumstances of the lis pendens because you don’t want to go to the expense of retaining a lawyer or hiring a building inspector if they wont be able to close.
You need to raise those questions directly with the seller. Also, you may be able to pull up a copy of the mortgage on ACRIS (City’s web site, go to finance page). If you plan to pay less than what is left on the mortgage, then you are in BHO’s territory and the deal can’t go anywhere. If the building is not underwater, then the bank can get paid at closing. But you want to know what else is out there — subordinate liens and the like, as well. Raise these questions with the broker — make clear you are a serious buyer but you do not want to go down the road a bit unless you know the deal is going to work. Don’t settle for vague assurances; make sure you know what is going on. Seller will have this problem with everyone, so dont’ worry about screwing up your bid with your questions.
The Lis Pendens filing is by the seller’s lender so most likely it’s for not paying his mortgage for 3+ months. If he pays-up or is paid-up to date, will the bank clear it or is it too late for that? Thanks all.
BHO, an eminent legal scholar on Obama’s Supreme Court shortlist, points to but one of the myriad possibilities. A lis pendens means there is a legal action pending affecting title, like vinca says. It could be anything from a bank foreclosure, to a contractor foreclosing on a $5k mechanic’s lien, to a nasty dispute over title among family members. Clear title cannot be conveyed so long as there is a lis pendens. But the lis pendens allows you or your lawyer to find out what the underlying suit is about because you will have the names and docket number of the lawsuit and you can go to the court and look at the papers yourself. Bank won’t close and neither should you without the lis pendens and the underlying lawsuit being cleared. But you need to find out quickly before you put more time and money into pursuing this optionwhat the underlying suit is about so you can figure out whether it is something that can be easily cleared before closing.