How long should it take for a lien to clear on a HUD house?

Home Forums Buying Your Home How long should it take for a lien to clear on a HUD house?

This topic contains 4 replies, has 2 voices, and was last updated by  admin 2 years, 10 months ago.

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  • #57319

    admin
    Participant

    I asked a similar question a week ago, but I was too vague. So, here’s more details:
    I’m in the process of buying my first home, it’s a HUD house. I paid the earnest pay, put in my bid, my bid was accepted, went through the home loan process, got my home owners insurance set up, now all that’s left to do is sign the title. When the title agency started going through all the information, they found a lien on the title. They said that the title agency that HUD went through was suppose to clear all liens on the house and missed one. Now the title agency I’m working through is trying to get this lien cleared. I have been to the home I’m buying several times and a neighbor told me that the previous owners both lost their jobs, got into some serious debt, and the sheriff took the home away from them. The title agency mentioned that the lien is for $ 700 and should clear quickly. I’ve been waiting 3 1/2 weeks for this lien to clear. I call the title agency regularly and they said all I can do is wait. The title agency copies their corresponding emails to me, so I do see that they’re working on it. I’m getting a little nervous because I need to be out of my apartment by the end of the year. How long should it take for a lien to clear on a HUD house?

    #248717

    admin
    Keymaster

    I’ve sold many HUD homes, and this only happened once to me – but it does happen. During the foreclosure process, the first lien holder notifies the subordinate lien holders that they can either buy the first lien or lose theirs entirely. This all has to be done certified. If a step is missed, the house could end up on the market too early (not a clean title yet) and it results in what you’re going through. Ours delayed closing about two and a half weeks, but it was frustrating. My buyer even offered to pay the bill, which was less than a hundred dollars, but HUD would not allow it. They fought with the HOA until it got taken off.

    Good luck with yours, but if you have until the end of the year, you’ll be fine. Congrats on winning the bid!

    #248718

    admin
    Keymaster

    I have seen HUD houses take a month or two beyond the original closing date before they can get the title clear.

    I think what happens is that HUD hires the title company that bids the lowest to do the work and sometimes that results in sloppy work.

    I have not seen a case where it took from now to Christmas. I guess it could but I doubt it.

    #248719

    admin
    Keymaster

    You are dealing with a government agency, by law the governing body must have a meeting and approve the expenditure of the funds. Then the approved funds are requested and released.

    They are not given a lump sum of money and told to spend it however and whenever they want. If they tried, they would go to jail.

    So it can take a couple of months for the money to be approved, requested and dispersed. It depends on how often the governing body meets, how busy the clerks under them and at the comptrollers office are.

    #248720

    admin
    Keymaster

    I bought 2 HUD houses. Drop off a cashiers check for $ 700 at your title company. Sign a paper stating that they can use your money as a guarantee that the lien will be paid off. WIth that guarantee, they can close the sale Wednesday. Their worry is that the lien is still on the property and the new title company will be responsible for it. YOur money clears the way.
    If the old title company pays off the lien (with HUD’s money), you will get your money back in 2 months when they stop fooling around with this. If not, you paid the extra money to get the sale done..

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