Can lender of a short sell put a lien on otherproperty

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Can lender of a short sell put a lien on otherproperty

I have 6 properties that are under mortage loans, I don’t have much equity in these houses. I am having a short sell of one house that is up-side-down $220,000. The lender of this short sell is asking me to sign a note of $240,000 for them to put a lien on one of my other properties before they sign off the short sell. This short sell house was refinanced and cashed out in 2007, and it has only 1 lender, no second loan. My question: If I don’t sign any note for the lien, Can the lender still put a lien in my other property?

Asked on May 15, 2009 under Real Estate Law, California

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If signing the note is a condition precedent to the short sale going through, then you may have to sign the note.  It sounds like they are requiring you to sign the not or not let you have the short sale.  Therefore, you probably need to sign the note if you want to deal to go through.  If you dont sign the note and there is no agreement that they wont seek the balance of whats owed, they may be able to put a lien on the other properties if they are in your name.  Why dont you have the properties in the name of limited liability companys to minimize your exposure?  I would consider do that after this mess ends (i.e. put each property in a different LLC so a problem with one property does not affect any other ones).


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