How can private party file lien on property

[nphx]

A retaliative i helped with home down payment had a divorce and home sold then dough was split and evaporated on both sides. He is still family. has 80k debt in school loans and good job. Now is in need of of 3500 to fund a bank account where he can qualify for a 2% student loan refi down from 6.x%. He has a rental property i also assisted with on down payment and home he bought (with mortgage) with proceeds of liquidating original home. I can afford the $3500 but would only do other family gifts as "liens" to prevent shenanigans in future. Is there a way to do a lien as a private party that is binding and near first in line?

 

[Brat]

If there are no other mortgages on the property you can make a loan and file it with your county. Franklly I would invest in an attorney to see that it was done correctly.

Short story here: DH and I had a condo in a resort community owned free and clear. We sold it with a loan on the title which was filed with the county, paid an attorney to do it right. About a year later they ran into financial difficulty and also filed for divorce. The husband told his creditors that he owned the condo. We got calls from creditors and had to tell them to stand in line. Ultimately we forclosed on the condo. Attorney fee well invested.

 

[Just_Steve]

I'm more interested in the 2% refi, care to share the source?

 

[tinlizzy]

I'm more interested in the 2% refi, care to share the source?

I was thinking the exact same thing!

 

[nphx]

https://www.firstrepublic.com/student-loan-refinancing/get-rates#slide-1

 

[CRLLS]

I was interested in the loan too. DS has student loans. Here is what the website says:

First Republic will rebate the interest that has been paid against the loan, up to 2.00% of the original loan balance if the loan is paid in full within 48 months.

This is not a 2% loan. There is no mention of what the rate really is. At best he will receive 80K *.02=$1,600 in exchange for you loaning him 3,500 to open the account. The big kicker is: that is only if he pays off the loan in 4 years. That's an aggressive payback schedule. I'd stay away.

 

[harley]

retaliative = retaliating relative?

 

[Texas Proud]

It is not hard to file a lien, but as others have said if there is someone in front of you then you are out of luck if there is no equity...

Also, I do not know if I would go to the trouble for $3500... sure, it might make the other party more likely to pay, but if he is a dead beat then a lien will not make a difference...

 

[nphx]

it says as low as 1.95% https://www.firstrepublic.com/student-loan-refinancing

 

[CaliKid]

In California (and probably other states) the relative would sign a promissory note and deed of trust. The deed of trust is the "lien" that attaches to the real estate. You would then record the deed of trust against the property. You could have an attorney draft it but for such a small loan I am not sure that's economical. Might be better to use Legalzoom or USdeeds.com

 

[splitwdw]

If I understand your post, you weren't repaid from the house sold after divorce (you said that money disappeared) and now this same person has a rental property (money reappeared from first home sale) and private residence that you helped with down payment. Now he needs 3500. to fund a bank account to qualify for a refi. Why do you keep lending this person money? It sounds like you aren't being paid back. Maybe you should think of these as gifts and not loans.

 

[RenoJay]

I do private lending that involves filing liens with county recorder. Though I don’t know the particulars, my real estate attorney charges about $900 per transaction (paid by borrower) to dot the i’s and cross the t’s. I suggest using an attorney.

 

[candrew]

In reading the OP and there being an expressed need to "prevent future shenanigans", I'm reminded of the perils involved in doing business with relatives. Too often it ends ugly.

 

[copyright1997reloaded]

In reading the OP and there being an expressed need to "prevent future shenanigans", I'm reminded of the perils involved in doing business with relatives. Too often it ends ugly.

+1.
I've made a personal decision that I won't lend any money to nieces, nephews, etc. If I do decide they need the money and I want to help them, I give them the money.

 

[Bamaman]

+1.
I've made a personal decision that I won't lend any money to nieces, nephews, etc. If I do decide they need the money and I want to help them, I give them the money.

I feel the same way about relatives. I have bailed out our kids a couple of times, but they have learned from mistakes.

I have another saying after a high volume loan career--First Loss, Least Loss. If someone has broken my trust once, they're never given another chance to do it again.

I am also a firm believer in letting people handle their own problems.

 

[ExFlyBoy5]

+1.
I've made a personal decision that I won't lend any money to nieces, nephews, etc. If I do decide they need the money and I want to help them, I give them the money.

Exactly this. I am not against helping friends and relatives, and I am not against "loaning" them $$$. But, I would consider it a gift...if they paid me back, then that's a bonus.

 

[MarieIG]

Can you? Yes. Should you? No.

 

[CRLLS]

it says as low as 1.95% https://www.firstrepublic.com/student-loan-refinancing

I missed that. Sorry. They do say 1.95-3.95 APR Effective as of 1/15/2018. I wonder what the range is today and how many of the applicants will get approved at that lower rate.

 

[Senator]

You can issue a second (or third+) mortgage on the property.

 

[MooreBonds]

If I understand your post, you weren't repaid from the house sold after divorce (you said that money disappeared) and now this same person has a rental property (money reappeared from first home sale) and private residence that you helped with down payment. Now he needs 3500. to fund a bank account to qualify for a refi. Why do you keep lending this person money? It sounds like you aren't being paid back. Maybe you should think of these as gifts and not loans.

+3,500!

How in the hell can he borrow money from you for a down payment, "loose it" in a divorce, then buy rental property AND buy a private residence.....then have the gall to come to you and ask for 3,500 so he can save money?!?!?!?!

Unless I'm misunderstanding something, how can you be this gullible If you want to GIVE out money like that, you are certainly free to do as you wish....but how can you look at yourself in the mirror and tell yourself this is a loan, just like the other "loan" (that they apparently are perfectly able to pay back to you, but simply never did), and fully expect him to repay you THIS loan, but not the first loan?

 

[ScottS]

A retaliative i helped with home down payment had a divorce and home sold then dough was split and evaporated on both sides. He is still family. has 80k debt in school loans and good job. Now is in need of of 3500 to fund a bank account where he can qualify for a 2% student loan refi down from 6.x%. He has a rental property i also assisted with on down payment and home he bought (with mortgage) with proceeds of liquidating original home. I can afford the $3500 but would only do other family gifts as "liens" to prevent shenanigans in future. Is there a way to do a lien as a private party that is binding and near first in line?

You've already been first in line - unfortunately that line is the one where he asks you for money. . You've already helped him twice, and as far as we can tell from your statement these probably haven't been repaid.
He has a mortgage and significant student debt. A mortgage company is highly unlikely to take a secondary position to any additional debt, and the student loans can't even be discharged in bankruptcy (possible, but only very unusual circumstances).
I have to ask - he has a good job and rental income from the rental property. Is he making any payment to you from either of these income streams to address the current debt to you? If not, I would not be surprised that once you provided the $3,500 and he qualified for the lower rate you would find that there was another "need" and that repayment of this amount would also be delayed, if ever repaid.
I have a brother that I lent money to to keep his house.
He has made very little effort to repay me, and even then only when I have asked - it has never been offered.
Do I love him - yes.
Would I lend to him again - No.

 

[nphx]

Thanks all, yes the crowdsourced assessment of "shenanigans" is accurate. These were "lent" on request for assistance with home down payments and in my mind treated as "gifts". But with his liquidating home, hearing discussion how "their" equity will be split and "his" half will fund down payment on new home and get him into a newer vehicle than my daily driver and a vacation to decompress... i am done. I have resources to help other family members but it will always be in a secured manner in the future.

 

[ScottS]

There was something I heard on a radio program many years ago as a suggestion for situations like this. I have never done this and have no idea if it is even possible or would actually work.
Instead of lending money to family directly use the funds as collateral for a secured loan at a bank. This takes you out of the loop as requesting / demanding timely repayment - the bank now assumes this responsibility. You still may lose your money if he/she doesn't repay but the bank becomes the "bad guy" for wanting it repaid.
Never tried this and don't even know if it would work.

 

[Texas Proud]

There was something I heard on a radio program many years ago as a suggestion for situations like this. I have never done this and have no idea if it is even possible or would actually work.
Instead of lending money to family directly use the funds as collateral for a secured loan at a bank. This takes you out of the loop as requesting / demanding timely repayment - the bank now assumes this responsibility. You still may lose your money if he/she doesn't repay but the bank becomes the "bad guy" for wanting it repaid.
Never tried this and don't even know if it would work.

Interesting thought.... but if someone does not want to pay you back and knows the loan is secured, they will likely not pay the bank back...

And why would they spend their time trying to get payment when they have a chunk of cash they can take the payment anytime they want...

 

[Texas Proud]

Thanks all, yes the crowdsourced assessment of "shenanigans" is accurate. These were "lent" on request for assistance with home down payments and in my mind treated as "gifts". But with his liquidating home, hearing discussion how "their" equity will be split and "his" half will fund down payment on new home and get him into a newer vehicle than my daily driver and a vacation to decompress... i am done. I have resources to help other family members but it will always be in a secured manner in the future.

I would just mention to the person that there is still a loan outstanding and that like any lending institution you cannot lend any more money until the first one is paid in full....

I would not go to the effort to secure such a small amount.... and also not punish other family members who were not a party to the other persons loan...