If the bank extinguishes the lein on a property does that mean no one can collect on it?

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If the bank extinguishes the lein on a property does that mean no one can collect on it?

I have a loan that the bank is
extinguishing. But i recieved a
judgement from the 1st time home buyer
program for the same loan. The
judgement came first. Will the banks
extinguishment get rid of the judgement
as well?

Asked on December 21, 2017 under Real Estate Law, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, it does not mean that no one can collect. Extinguishing a lien means nothing more or less than that this lien ia gone; however, anyone having a judment against you arising from this loan can still collect on the judgement. A lien is not a judgment; it is simply one way to collect on that judgment, and giving up th at collection tool does not extinguish  the underlying judgment. Also, you write that a bank extinguished the lien, but that the judgement was obtained by a different entity, the first time homebuyer program. The bank cannot eliminate someone else's judgement.


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