I'm have sold my home and I'm supposed to close this afternoon. My realtor just called me and said that I have a lien on the property from the builder. This lien was placed in July 2006. I purchased the home new from the builder in December 2005. This is the first I've ever heard about a lien. The builder has since gone bankrupt and is currently in jail for fraud and is under Federal investigation. If the company holding this lien has gone bankrupt, is the lien still valid? Will my sale still go through? I need some answers QUICK! Thanks!

Didn't you hire a title company? This can be a major problem. The lien will need to be satisfied or removed before you can close.

My realtor hired a title company and they just found out this morning that there was a lien. How can the lien be paid if the company is bankrupt and out of business? Not that I have $3000.00 in my back pocket.

If the company is in bankruptcy, you need to get a release from the recever.

The Title company may hold out $3K from the proceeds of the sale and place it in escrow pending resolution of the lien.

How do I do that, and how fast can I get it?

See my amended answer. Talk to the attorney handling the closing.

I'm not that familiar with a builders lien, but wouldn't he have had to take you to court in order to get this lien in place?

Were you served notice to answer, or appear for a hearing?

If a suit was required for this lien to be placed against your home, and you were never properly served to answer or appear, you may be able to motion to vacate the judgment based upon no legal service.

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Originally Posted by progunr

I'm not that familiar with a builders lien, but wouldn't he have had to take you to court in order to get this lien in place?.

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This probably falls under the heading of a mechanics lien which doesn't require a court order.

I was NEVER served anything and there was no hearing that I know of. The other problem, in addition to this, is that this sale is a short sale to avoid foreclosure after my divorce. My ex also has NO IDEA about this lien. There are no proceeds of the sale, so now what?

You are caught between a rock and a hard place. The buyer wants clear title, you can't give it, at least not unless you place the $3K in escrow.

Don't you have an attorney handling the sale? Have you asked them?

I can't get a hold of the attorney, no one answers, and I only get voicemail.