A lien, including a mortgage lien, is an arrangement where one party cedes equity or a stake on a piece of property in exchange for a loan and only regains full control of said property back once their debt has been paid in full. Mortgages aren’t commonly perceived as a lien, but in essence that’s exactly what they are. In fact, it’s the most common type of lien individuals have today.
Understanding the laws that surround owning a home in Puerto Rico will ensure you are well-prepared for the responsibilities involved, including obtaining a mortgage lien release. For instance, there are various Vieques real estate laws you have to abide by when selling a property. If you are still paying your mortgage off then your lender or bank still holds the note to your home and will have to be involved in the transaction. This Puerto Rico real estate law ensures that the property note is released or transferred before the end of the transaction.
If the lien isn’t properly released or transferred to the buyer, and the money isn’t repaid to the lender for the debt, the bank has every right to repossess the property or they can choose to halt the property’s sale. The lien release has to be signed by the bank, which shows the bank recognizes that the real estate is no longer theirs.
Lien Releases Aren’t Always Provided
One issue we’ve seen practicing in Vieques real estate law is homeowners still having a lien over their head well after they’ve paid off their mortgage. Under Vieques law, lenders are supposed to send the homebuyer a notice of lien release within 30 days after repaying the debt by outright purchasing the property or submitting a final pay-off of the loan. But if the bank refuses to release the lien, an attorney well-versed in Puerto Rico law will be needed.
Liens On Properties that Have Already Been Repossessed
Losing a home is devastating for families, but it happens to even the best of us. The economy is shaky, making it hard for individuals to keep up with their mortgage payments. This is one of the many reasons why a property might be repossessed. Another reason is if the homeowner defaults on their annual property taxes. In this case, the county or city can take ownership of your home and then sell it at a sheriff’s sale. The issue is that when the property is purchased from these auctions, there’s still a lien tied to the property. A home will also keep a lien if the owner moves away and stops paying the debt.
A lender can step in and halt the sale of a property if the lien hasn’t been paid. In order for the property seller to fight against the lender, a real estate lawyer has to be hired to advocate for the release of the lien. Normally, the maximum amount of time a property can have a lien on it is ten years. If ten years have passed, the lien release may no longer be necessary. However, if the bank tries to fight you, a lawyer can be helpful in advocating your case.
In some cases, the judge may compel the lien holder to release it to the property owner. It’s best to have a lawyer on your side in this matter.
Frequently Asked Questions
If you’re still wondering how mortgage liens work, the following FAQs may help clarify things.
- If I refinance, what’s the process for the lien release? When a property is refinanced, the title company pays off the bank and will then become responsible for releasing the lien when the time comes.
- If I pay off my mortgage using a check, will the lien be released right away? It’s important to check with the lender to ensure the lien has been properly released. The lien should be released to either the city or county office and then the recorded release will be forwarded to you or the release will be given to you and you will have to record it.
- Does my lien need to be released if I have an equity line with a zero balance? A zero balance on your equity line doesn’t mean the lien on your property has been released. It’s up to you to request for the account to be closed and to have the lien released sent to you.
- How is a property lien released? Once you have paid off the loan on your home, a Release of Lien or Certificate of Satisfaction is given to you from the lender. It is also recorded that the lien has been fully paid and released from the property.