secured vs unsecured

[blessed]

Is a loan for a furnace and A/C secured? Are they going to come and yank out my furnace? That would kind of be funny if they tried. Imagine that.

[LALADY]

What does the loan paperwork say?

[blessed]

I have no idea. I'll look and see if I have it. If it is secured what will happen?

[LALADY]

Have no clue. Only secured item I have is house. All appliances, car, etc. paid for cash.

[Shawshank]

What type of loan was it?
Was it a home equity loan, line of credit, bank loan, etc...
Or did you pay it with a credit card?
If we know who actually financed the unit, we'll try to help.

[dspii]

Did you get a 1098 interest statement from them? If so, it is secured by the interest in the property. I had the same thing when I put windows in a few years back, I had no idea it was a secured loan, until I got the 1098.

[MSbklawyer]

In most states, the lender would have had to do what is know as a "fixture filing", which is a special kind of U.C.C. filing. Personal property that is attached permanently to real property becomes a part of the real property, e.g. a furnace in a house. So the answer to the question turns first on whether they took a security interest at all in the furnace. Second, did they take the extra step of perfecting their security interest by doing a fixture filing.

[OhioFiler]

They can not take the furnace or A/C unit.

In plain English, what MSbklawyer is saying is it is possible they may have attached a lien to the house. Highly unlikely.

Isn't that what you said MSbklawyer?

[blessed]

The financing is with American General, so it's a line of credit, but not home equity loan. It was a 12 month same as cash deal.

I did find some paperwork and there is wording that says, "transactions on your account could result in a security interest or lien on your home"

"If you cancel the account, the security interest in your home is also canceled.... If we do not take possession of the money [we are supposed to make a reasonable cash offer] or property within 20 calendar days of your offer, you may keep it without further obligation"

[blessed]

So I guess a couple options could happen?
1. They object and put a lien on the house, want us to pay the balance or some other negotiated amount.
2. They don't object and we don't hear a word from them.
3. They don't object and then try to collect later, to which I've read if we ignore them they will most likely go away.

[MSbklawyer]

They can not take the furnace or A/C unit.

In plain English, what MSbklawyer is saying is it is possible they may have attached a lien to the house. Highly unlikely.

Isn't that what you said MSbklawyer?

Very unlikely. But if they have, a fixture filing is like a mini second mortgage.

[momofthree]

If you go down to your local title company (you may even be able to just call the customer service dept) and have them print out your "property profile" it should tell you what liens you have against your home. If you have access to a fax machine, you can just call and have them fax it to you. It's free. That way you don't raise any red flags with the finance company by calling and asking about the security interest they have in your unit.