How do I collect against a 2nd lien on a home that is for sale?

UPDATED: Aug 2, 2011

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How do I collect against a 2nd lien on a home that is for sale?

I made a personal loan to a relative and recorded it as a second lien on his home. The original mortgage is the first lien. The equity is greater than both liens. When the home is sold does the title company in MI mail a check to me? I live in TX. Do I need to attend the closing or have an attorney attend?

Asked on August 2, 2011 Michigan


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you have a recorded trust deed or mortgage on your relative's home securing your loan to him or her, the recorded document will show as a lien on the property of record. If the home is sold, prior to close, the escrow company will order a preliminary report seeking all liens of record needed to be paid off on the home to transfer title to the new owner without the liens.

You will be given notice of the escrow by the escrow company where a settlement demand will be sent to you for pay off of your loan. Hopefully your trust deed of record has your current mailing information. If not, you need to record notice of your new mailing information of the relative's property as part of the recorded trust deed/mortgage so you can be contacted.

You do not need to attend escrow's closing or have an attorney attend. The settlement check on your loan's pay off would typically be sent to you by escrow certified mail, return receipt requested.

Good question.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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