Lien Priority Disputes

Title defects cause huge fights over lien priority and are a major reason homeowners are unable to sell and buy property.  The Firm is capable of handling these lien priority disputes through quiet title actions, negotiations, or litigation.

Income Taxes:  An IRS tax lien arises automatically when a person fails to pay taxes.   This lien remains until paid or the tax assessment expires which is 10 years. The tax lien lacks priority against listed classes of creditors until the Notice of Federal Tax Lien is filed.  Holders of security interests, mechanic’s lien and judgment lien creditors have priority over federal tax liens if filed first.

State Taxes:  State Tax Liens must be filed before IRS tax liens to have priority, even if the state lien arose automatically when the state taxes were unpaid.

Elimination of IRS tax liens: (1). Certificate of Release where the tax is fully paid or compromised, (2) Certificate of Discharge which only affects the specific property listed and does not affect taxpayer’s other property, (3) Certificate of Subordination where the IRS can subordinate its lien in specific property if the IRS is paid the value of its interest or the IRS believes it will realize more money by issuing the subordination, (4) Withdraw of the IRS lien can be due to a prematurely filed lien or a lien in violation of IRS procedures or where the taxpayer has entered into an installment agreement where the agreement provides for the withdraw of the lien.

Lis Pendens:  The filing of a lis pendens does not perfect a lien.  The purpose of recording this document is to give claimants constructive notice of a potential lien.   Once determined by a court, the filing may result in a perfected lien.

FIVE MAJOR ASSIGNMENT ERRORS

(In Missouri mortgages (proper term is deed of trust) are assigned, not promissory notes.  Get it right the first time. An assignment is a document that shows the transfer of a deed of trust from one person/entity to another.

  1. Data errors:  Incorrect book/page, leaving blank the name of the assignee.  You cannot fill in the blanks after the document has already been signed and notarized.  Missing chain of assignment.
  2. Not recording assignments: People are cheap when they do not record an assignment.  Failure to record may not be required by law but it does cause tremendous title issues.
  3. No uniformity in recording:  Creating a template without knowing the county recording requirements is suicide.  There are more than 3,600 recording districts in the United States.  Many have different recording requirements, regulating font size, margins and signatures.
  4. MERS:   Mortgage Electronic Registration Systems no longer commences legal actions in its name. As a result assignments must be prepared.  There is a backlog.  There are times when the MERS number is not on the assignment when it is recorded or the wrong number is attached to the loan or MERS forgot to deactivate the number after it has been assigned.
  5. No Timely release:  If the loan is paid off, a release is required to be recorded.