My house had 7 liens! (T.o.H. Series)
This is the story about what happened to me when I was not concerned about the CLG (lien-free certificate) in my real estate transaction.
When I first arrived in Morelia 10 years ago, I was looking for a property to buy. I was looking around for one week or so and I couldn’t find anything. I wanted to buy a small house or an apartment just for myself, then, I saw a beautiful, very nice size lot in Patzcuaro, which caught my attention, but the price was over the amount of money I had to buy anything, so I told the seller that it was not in my price range and passed on it.
The seller started to call me, making me offers, pushing me, lowering the price until he got to half of the starting price, then I decided to buy it. He wanted to close it right away, closing by next day, but I said I wouldn’t close it until he showed me the certificado de libertad de gravamenes.
He got the certificate the very next day, I saw the certificate and the lot was free and clear. We went to the notario´s office and I showed the CLG and asked to attach it to my deed (they did not care, but they did it anyway), then we signed the deed.
I decided to build something on that lot, in fact I did! There is a very nice 3 bed/3 bath, garden, courtyard, colonial style home, etc., a 285k beautiful house (now is actually lower because of the exchange rate).
Two years ago I asked for a loan (to build another house) and gave my colonial house as colateral.
The mortgage company did not approve my credit, based on NOT ENOUGH COLATERAL WARRANTY! What? how? excuse me, what are you saying? Well, they told me that my house could not be a colateral because it had 7 different liens!
Actually, they did not tell me, I had to found out, but that’s another story.
The fact was, I got the CLG showing 7 liens. I was terrified, period.
Practically, I did not have a house! all those old liens, plus the Interest, plus trial expenses, you name it!
As you can imagine, after crying, getting depressed , blaming myself for being that dumb and naive for about one day, I took the only approach recommended: I hired an attorney!
Why did I do this if I am an attorney???
Very simple: you always need an expert. Even though I consider myself an expert now in real estate transactions, those actions involved a possible fraud, so I hired a criminal trial attorney.
I was also lucky to know where the sellers live in Patzcuaro (a lot of times you will not see the seller again in your life), so I designed a strategy and asked the attorney to write a first letter to sellers, so they will act, pay or whatever they needed to do to remove the liens.
This time, my story had a happy ending: the sellers removed all the liens at their cost very quickly (of course they knew they had a criminal trial over their backs). I have got a new CLG and my house is FREE AND CLEAR!
My mistake: when I bought the lot, the seller showed me a 10 year CLG, the liens were older than 10 years.
Lesson learned: Always ask for 20 years CLG, before you commit to any purchase, period.