Legal Question in Real Estate Law in California

Re: Is Lien Impediment to 2nd Mortgage?

You can obtain a 2nd or even a new first mortgage if you have sufficient equity in the property. If you attack the $4000 lien and seek to have it declared void for lack of service, you can bond around the lien in the interim, which will be required by the title company before they will except the lien from title allowing a lender to make the loan.

You should have an experienced attorney attack the lien by motion. Since you state that the lien if from a roofer, though, a mechanic's lien will probably remain pending your successful defense of the action. You may best be advised to have the attorney contact the trustee in bankrupcty and negotiate a satisfaction of the lien for some more nominal amount. It will be cheaper than litigating the issue.

Re: Is Lien Impediment to 2nd Mortgage?

Perhaps you should look at it this way. As long as the lien is there, you're really talking about a third mortgage, since the lien probably has priority over the proposed new financing. The lending industry will be concerned about the lien, even though it's relatively small, because it gives them a whiff of trouble. It would affect your apparent creditworthiness and thus your interest costs. Whether the new loan is do-able at all would really depend upon how much equity you have in the property, your income and your credit rating (which you didn't mention).

Removing the lien without paying it depends on whether it is a mechanics' lien or a default judgment lien (or perhaps something else).

A mechanic's lien can be removed by obtaining and recording a bond. Talk to a local bonding company regarding cost, eligibility and application procedures. Mechanics' liens are also subject to early expiration (90 days after recordation) if not enforced by initiating legal action.

If the lien resulted from a default judgment, your chances of obtaining relief from the court depend upon whether you had actual notice of the legal action against you, or not. Even a technically deficient service of process may be sufficient to give actual notice. If you had actual notice, you must move for relief within six months. If you had no actual notice in time to defend the action, and lack of notice was not due to your avoidance of service or inexcusable neglect, you may have up to two years to seek relief, but the rules become too complex to discuss here, and you'll probably need the assistance of an attorney. See Code of Civil Procedure sections 473 and 473.5.

Re: Is Lien Impediment to 2nd Mortgage?

Lien will probably prevent refi. You can move to set aside judgment and if no one objects you may be free of the lien.

JOEL SELIK

800-894-2889

WWW.SelikLaw.com