How is $25,000 lien removed when home is sold?

Home Forums Purchase Program How is $25,000 lien removed when home is sold?

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  • #15238
    debbiek55
    Participant

    I’m a real estate agent listing a home that was purchased through the NACA program. The homeowner has documentation indicating the $25,000 has been released pending the sale of the home.
    What concerns me is the $25,000 lien is rolled into the home loan. How is the $25,000 subtracted from the loan for a payoff?
    Thank you
    D—- K——–

    • This topic was modified 6 years, 7 months ago by TTrumble.
    #15263
    kmjatl
    Participant

    So you’re making payments on an extra $25,000?

    The (filed at the courthouse) lien documents I have seen do not appear to state a dollar amount.

    #15264
    rashad3000
    Participant

    It’s a “silent” lien.

    #15265
    debbiek55
    Participant

    Then why was $25,000 added to the mortgage loan?
    Homeowner’s payoff will be $25,000 higher than it should be.
    Purchase price of home: $135,000, orignal loan amount $168,000 (closing costs, etc. included)

    #15266
    debbiek55
    Participant

    So the payoff for the loan when we get it under contract will be based on $168,000 and not the $135,000 purchase price?

    #15271
    kmjatl
    Participant

    This is really a question for Tim Trumble.


    @debbiek55
    what’s on the HUD-1? Does the owner still have access to their web file? I bet it’s there.

    I just looked up a few recent NACA sales in my area, and I’m not seeing Security Deeds that much higher than the purchase price (online courthouse records and realtor.com are very convenient).

    My understanding is the lien is to keep the homes owner occupied and keep investors out. Probably a condition of the banks’ providing funding.

    • This reply was modified 6 years, 7 months ago by TTrumble.
    #15273
    kmjatl
    Participant
    #15320
    TTrumble
    Member

    Hello debbiek55,

    The $25,000 lien is NOT included in the loan. It stands alone as a second lien and is only enforced when someone violates the owner-occupancy requirement. There is nothing to subtract.

    Furthermore, there are no closing costs on a NACA loan, as our agreement with the banks require them to cover the closing costs. Any funds above the purchase price in the loan would be funds that were used for repairs/rehab of the home, and are a legitimate inclusion on the payoff.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #15321
    rashad3000
    Participant

    Tim, out of curiosity, how many times have you seen the $25,000 lien enforced?

    #15322
    debbiek55
    Participant

    Thank you Tim – I appreciate your reply. This answers my questions.

    #15405
    TTrumble
    Member

    Hello rashad3000,

    Twice that I’m aware of. Both were cases where the homeowner bought another primary residence and tried to surreptitiously turn the NACA-bought home into a rental property.

    There are cases where a legitimate exception is warranted, and such cases are taken to our CEO for approval on a case-by-case basis. We’re not out to get and extra $25K from anyone, just to make sure that the program is not abused.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #15407
    rashad3000
    Participant

    Tim, I understand.

    If someone is deployed and they are underwater, I’m sure NACA would rather them rent the property out than let it foreclose, correct?

    Also, how in the world do you guys find out when someone DOES actually become an investor?

    #15408
    kmjatl
    Participant

    Hasn’t anyone told you? NACA volunteers visit your home on a monthly basis to make sure you still live there…. 🙂

    #15409
    rashad3000
    Participant

    Kmjatl, I don’t believe that for a split second. LOL

    #15410
    kmjatl
    Participant

    Bruce Marks…he just knows 🙂

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