Clearing the Slate: How to Get Rid of Old Liens

The Expert Podcast

What is a Zombie Mortgage?

• A zombie mortgage is a loan placed on a property many years ago (e.g., 15-20 years).
• It often arises from a mortgage that was foreclosed, charged off, renegotiated, or adjusted.
• The problem occurs when a lien release is never filed in the property records, even if the mortgage was paid off or cleared.

Impact on Borrowers and the Real Estate Market

• Without a lien release, the property remains encumbered and cannot be sold or refinanced.
• Debt collectors can later claim there's still a mortgage on the property and attempt to collect the debt, often with added interest, penalties, and fees.

Other Types of Zombie Debt

• It’s not just mortgages—car loans, title loans, and even lawsuit judgments can resurface.
• Any old loan with a recorded lien can reappear, causing problems for property owners.

How to Deal with Zombie Mortgages

• Getting a Lien Release:
  • The original lender or creditor must issue the lien release.
  • This process should be handled via postal mail, not by phone, email, or any electronic means.
  • Prepare a package of documents, including the lien release form, letter of non-interest, affidavit of facts, and declaration.
  • Include a return envelope to make it easy for the creditor to send the signed documents back.
• Multiple Locations:
  • Send the package to multiple office addresses of the creditor to increase your chances of getting a response.
• Original Creditor Only:
  • Only the original creditor whose name is on the record can sign the lien release.
  • If the loan was assigned to another company, they cannot sign unless you have all the assignment documents.

Key Takeaways

• Always request the lien release in writing.
• Send your request to multiple locations.
• Include a return envelope to facilitate the process.

Additional Resources

• Consider consulting with a title agent or investigator for assistance.
• For more insight, check out other videos on our channel.

Need Help?

• If you have further questions or need assistance with the documentation process, click the link below for a consultation.

Conclusion

• Clearing zombie mortgages and liens is crucial for property transactions.
• Act now to avoid complications in the future.