Is this true regarding lien strips?

[mylife]

A short sale attorney told us we had to wait until discharge was final before listing our home. Said the second mortgage will not do a lien strip if you're selling your home. They only do it or agree to it because they think you're keeping it.

[mylife]

My attorney has come back to say that's not true and the strip happens at discharge.

[LadyInTheRed]

A short sale attorney told us we had to wait until discharge was final before listing our home. .

Whether you can list your home before discharge is a matter between the listing agent and you. But, you will not be able to close on a sale before you are discharged and you have an order voiding the lien unless the buyer will take the property subject to the lien. I would be sure that any purchase contract includes a contingency that the sale can't close until the court issues the order. You don't want to get sued by a buyer for breach of contract because the court is slow in getting the order entered. The bank does not have to agree to the short sale at all. So, it can require whatever it wants.

Said the second mortgage will not do a lien strip if you're selling your home. They only do it or agree to it because they think you're keeping it.

This is an odd statement. The holder of the 2nd mortgage has no choice of whether the lien is stripped. But, until the lien is in fact stripped, they do not have to agree to the short sale. Perhaps that is what the attorney meant.

[mylife]

Thanks for the information Lady. Once we have been discharged, is there then another wait for the lien strip? Our bk attorney said it happens automatically. That unusual comment is from the short sale attorney and it seemed a little off to me too.

[despritfreya]

Once we have been discharged, is there then another wait for the lien strip? Our bk attorney said it happens automatically. That unusual comment is from the short sale attorney and it seemed a little off to me too.

Find a copy of the Order that strips off the 2nd. What does it say? Such Orders in my neck of the woods state that the lien is not subject to voiding until the entry of the Discharge. They further typically state that upon entry of the discharge the lender shall record a release of the lien and/or the debtor can record a copy of the Order (or judgment) and such recording will have the effect of releasing the lien.

Something officially releasing the lien needs to be recorded at the appropriate time.

Des.

[LadyInTheRed]

Find a copy of the Order that strips off the 2nd. What does it say? Such Orders in my neck of the woods state that the lien is not subject to voiding until the entry of the Discharge. They further typically state that upon entry of the discharge the lender shall record a release of the lien and/or the debtor can record a copy of the Order (or judgment) and such recording will have the effect of releasing the lien.

Something officially releasing the lien needs to be recorded at the appropriate time.

Des.

To add stress to the des' first sentence, the procedure is different here in the Northern District of CA. My order valuing lien states: "(3) Upon entry of a discharge in Debtor's chapter 13 case, the Lien shall be void for all purposes, and upon application by Debtor, the court will enter an appropriate form of judgment voiding the Lien."

The procedure is also described in the local court rules.

According to my attorney's assistant, it will be up to me to get a certified copy of the judgment voiding the lien from the court and record it with the County Recorder, but I am sure my attorney would do it if I wanted to pay him to.

[justbroke]

LadyInTheRed seems that your court is 100% by the book and no joke. The Districts in Florida don't seem to handle it that way, but we do have a Judgement book when there are money judgments.

[mylife]

Thanks to you all for the comments. It's still a little confusing but patience patience patience!

[Pandora]

To add stress to the des' first sentence, the procedure is different here in the Northern District of CA. My order valuing lien states: "(3) Upon entry of a discharge in Debtor's chapter 13 case, the Lien shall be void for all purposes, and upon application by Debtor, the court will enter an appropriate form of judgment voiding the Lien."

The procedure is also described in the local court rules.

According to my attorney's assistant, it will be up to me to get a certified copy of the judgment voiding the lien from the court and record it with the County Recorder, but I am sure my attorney would do it if I wanted to pay him to.

Both are true for us.... It was $42.50 to get certified copies from US BK court clerk, then was $22.00 to record in Circuit Court. Just came back from the court house recording with the clerk of the court the certified stamped copies of Official Discharge and Order avoiding Lien. Both had to be recorded in Land Deed book with copies of receipts to be provided to our attorney. Will see if its been done correctly in a few weeks when we pull the deed book and see it it was voided