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RealEstateAnswer
RealEstateAnswer, Lawyer
Category: Real Estate Law
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Experience:  7+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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We hold a lien against a residential property in Kansas because

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We hold a lien against a residential property in Kansas because we gave the owners $20,800 to make the down payment. The couple had been making regular payments to us to pay back the $20,800until they decided to sell the house. In selling the house they are taking a dollar amount that will cover the bank repayment but no one is telling us how much we will get, but we do know it will not cover the $15863.01 that is owed to us. Our regular is out of town until Monday and the bank is wanting an answer today. We have a mortgage lien and a promisory note from the couple. If we take a small amount and sign another note with the couple then the new note becomes an unsecured debt. How much interest can be charge them by Kansas law. And what should we ask for in the note (such as, we will be able to garnish their wages without going through a Collections Agency?)
Submitted: 8 months ago.
Category: Real Estate Law
Expert:  RealEstateAnswer replied 8 months ago.
Hi! I will be the professional that will be helping you today. I look forward to providing you with information to help solve your problem.

Why does the bank want to answer today? The reason I am asking is because in order for the sale to proceed and for the purchase to close, you are likely going to have to agree to release your lien, since you are not getting paid off in full. The buyer is certainly not going to want to take the home with a lien on it. Also, do you think these people will continue to pay what is owed or are they likely to default?
Customer: replied 8 months ago.

Apparently the bank has been working with the couple (collecting interest only, which I think is illegal in KS) to sell the house since August. The bank has a buyer and the buyer wants to get into the home as soon as possible. The bank wants that too as the couple is behind on their payments and every day the house does not sell means more money the couple owes to the bank.


 


I believe the couple will default since they defaulted and were contacted by our attorney in January/February for missing the December and January payments and now they have missed the deadline for this month's (October) payment.

Expert:  RealEstateAnswer replied 8 months ago.
Cynthia, thank you for the additional information. While the bank may want an answer today, you hold a very strong position and should advise them that you will be consulting with your attorney, he is out of town until next week and that is when they will receive an answer. The buyer is not going to want to buy this property if there is a lien on it, so they are hoping you release it. If you have doubts about the party paying on the note, then you likely do not want to release your interest/lien, until you get paid in full. If you were to do this and they would sign a note and fail to pay, you would then have to sue them, obtain a judgment and go after their wages or assets to satisfy it. This would take additional time, effort and money. Your attorney know the situation the best, XXXXX XXXXX not make any decisions until you speak with him/her and advise them of the situation. Simply tell the bank that you will have an answer by next week and I am inclined to believe they will wait, since they need your cooperation to sell this home. If the home is the one thing you have securing the loan, you certainly do not just want to give them up, if you are not going to receive anything in return. You also need to find out what the surplus from the sale will be, if any, so you know what you will still be owed. If you are getting only a small amount, I do not see how it would benefit you to release the lien.

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RealEstateAnswer, Lawyer
Category: Real Estate Law
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Experience: 7+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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Customer: replied 8 months ago.

Would you clarify this statement for me? It is part of the promisory note.


 


"In the event of default on this Note, and pursuant to KSA 58-2343, Borrower irrevocably assigns, transfers and sets over to Noteholder, their heirs and assigns, any and all or any part of any rents, issues, profits and income arising from the real estate herein described. Noteholder shall have the right to use such measures deemed necessay to enforce payment of said sums and to fill any vacancies and to rent, lease and let the property or any part thereof."


 


 

Expert:  RealEstateAnswer replied 8 months ago.
Certainly. It appears as though it would apply to a situation where they leased/rented the property out and there was a tenant in possession. You would be able to collect the rent from the tenant, if they were in default on the note.

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