The Vital Topic of Liens in Real Estate

The Vital Topic of Liens in Real Estate
A lien is defined as a claim against a property for
repayment of a loan or other judgments.

This sounds like a very boring topic, but it's one of vital
interest to you as an investor. This is because of one very
important fact--a lien affects the ability to transfer
ownership of a property!

Believe me, it gets very exciting (and unpleasant) when a
lien pops up and causes a very profitable deal to fall
through. Failure to do due diligence on properties can cost
you a lot of money!

So, my advice is to study closely the information in this
article. It can keep you on the path of profitability and
save you considerable heartache.

Categories of Liens

As I said earlier, liens are a claim against a property. In
general, there are two categories of liens—voluntary
and involuntary.

A voluntary lien is a mortgage or deed of trust lien. In
other words, when you buy a property, you agree that the
lender has a claim on that property until the mortgage or
deed of trust is paid in full. An involuntary lien is the
result of legal action. Hopefully, you won't have to deal
with every type of lien I describe below, but, if you do,
you'll be forewarned and forearmed and can deal with the
situation in the most effective way possible.

Types of Liens

Bail bond lien

A bail bond allows a person arrested on criminal charges to
be released on bail pending his or her trial. One way to
get a bond is to pledge capital in the form of real
property (a home, etc.).

Child support payment

When a property owner fails to make court-ordered child
support payments, the state government places a lien
against the property's title.

Code enforcement lien

This type of lien occurs when a property owner is fined for
failing to correct code violations and fails to pay the
resulting fine.

The local enforcement board then places a lien on the
property's title.

Corporate franchise lien

This lien can occur within states that have a corporate
franchise tax for the right to do business within those
states. If a corporation fails to pay the tax, the state
places a lien against any corporate real property within
the state.

Federal judgment lien

This lien involves debtors who've defaulted on federally
guaranteed loans (SBA loans, student-guaranteed loans,
etc.). When default occurs, a lien is placed against the
property title.

Federal tax lien

When a person fails to pay federal income tax, the Internal
Revenue Service has the statutory power to place a lien
against the title of any real property belonging to that
person.

Needless to say, you don't want to fall into the swamp of
legal entanglement that comes from dealing with the IRS.

Homeowners' association lien

This lien occurs when a member of a homeowners' association
fails to pay his or her dues as per the deed to the
property. The lien is placed against the property title.

Judgment lien

This type of lien occurs when lawsuits award monetary
damages to the plaintiff against the property owner. In
this case, a lien is placed against both personal and real
property of the defendant until the judgment is made.

Marital support lien

A lien is placed against a property's title when a property
owner doesn't pay court-ordered marital support. This can
be done on the local, state and federal levels.

Mechanic's lien

This is a statutory lien which allows architects,
contractors, engineers, mechanics, surveyors, etc. to take
legal action against a debtor who's failed to pay for
furnished work or material for the improvement of real
property. The lien is placed against the real property
being worked on.

Mortgage and deed of trust lien

As I mentioned earlier, this is a voluntary lien created
when real property is pledged as security for the repayment
of the debt.

Municipal lien

A lien is placed against a property's title when a property
owner fails to pay for municipal services (e.g., water,
electricity, etc.).

Public defender lien

When a property owner fails to pay for a court-appointed
public defender, governments place a lien against the
property title.

Real property tax lien

When a property owner fails to pay his or her property
taxes, liens are placed against the property by local
authorities.

State inheritance tax lien

This is a tax levied against the estates of deceased
individuals.

If the tax is not paid, a lien is placed against the estate
for the amount owed.

Welfare lien

The local, state, and federal governments can place a lien
against the property's title when a property owner
fraudulently collects welfare payments.

Sources of Information About Liens

There are many local, state, and federal sources for
getting detailed information on liens. In terms of state
and local agencies, the names vary with the region, but, in
general, you can get information from the following offices:

Circuit court office

Check for tax liens on state income, state inheritance,
state franchise taxes, etc. Also, check for liens against
estates of deceased persons, guardianship of minors and
incompetents, termination of joint tenancies, etc.

County clerk's office

Check for the same items as in the circuit court office.

Country recorder's office

Look for judgment liens, property tax liens, federal tax
liens, etc.

Check for conditional sales contracts (contracts for deed,
land sales contracts, etc.).

Also, look for notices of "lis penden." This is a notice
filed or recorded for the purpose of warning all persons
that the title or right to the possession of certain real
property is in litigation. The Latin term literally means
"suit pending."

Municipal clerk's records

Analyze the records for any liens for failure to pay for
municipal services like water, sewer, and trash removal
services. Also, check for any code enforcement fines.

United States Court

Look for any federal judgments against the title holder.
These could include federal tax liens and liens resulting
from defaults on FHA, Department of Veterans Affairs (DVA),
SBA, and student loans.(see
http://www.pacer.psc.uscourts.gov )

Key Point: Always, always perform due diligence in regard
to liens! A little investment of research time can make the
difference between a nice profit and a financial and legal
nightmare!

Jack Sternberg

----------------------------------------------------
Jack Sternberg is a nationally recognized expert on real
estate investment who's been in the business for more than
30 years. Sternberg is the creator of the renowned "Buyers
First" Program. His deals have totaled over $750 million
and he's been to the closing table more than 1,500 times.
For more, visit http://www.askjacksternberg.com

3 Surefire Ways to Stay Broke

3 Surefire Ways to Stay Broke
Are you broke?

Want to stay that way?

I can help you...

Here are three *surefire* ways to stay broke:

Surefire Way #1 - Always look for something for nothing.

And when you find it, take it, no questions asked!

See something you want on the Internet? Look around for
someone who stole it and get it from them for free (what do
you care, right?). Find money on the floor or ground,
regardless of how much it is, that someone else accidently
dropped? Pick it up and stick it in your pocket (finders
keepers, losers weepers, right?). Get to much change back
at the store? Keep your big mouth shut and pocket it (to
bad for them, right?).

Always look for something for nothing, take it when you
find it, regardless of how you get it, and revel in the
fact you do so...

This will keep you in the proper state-of-mind that's
absolutely necessary for staying broke.

Bonus Tip! When you do buy something, regardless of how
much it might be worth and how much value it'll add to your
life, always go out of your way to get it cheaper (the
closer to "nothing" you can get something for, the better).
Nickel-and-diming others and making sure you always get
"the better end of the deal", without any regard whatsoever
for the other person's interests or welfare, will go a long
way toward insuring you stay broke.

Surefire Way #2 - Always spend more than you earn.

Not long ago, a friend of mine was telling me about a
neighbor of his whose home was being foreclosed on. It
turns out his neighbor, who could no longer afford his
monthly mortgage payments and hadn't made any for some
time, had owned the home for over forty years yet owed, get
this, $250,000 on a home that at best could be sold for
$175,000 right now.

After he finished telling me about his neighbor, my friend
asked me, "how's that happen, how does someone own a home
for over forty years and end up owing more on it than it's
worth?"

"Simple," I said, "one dollar at a time, financing their
deficit on their credit cards, refinancing their mortgage
or using a home equity loan to pay them off after they're
'maxed out', and then repeating the cycle."

"You know, it's funny you say that," my friend replied,
"just the other day, that same neighbor told me he went out
and bought a brand new riding lawn mower."

"Doesn't he already have one?" I asked.

"Sure does," my friend answered.

"So why'd he go out and buy another one?" I asked.

"He told me it was because it was a $1,200 mower on sale
for, as he put it, 'only' $800," my friend answered.

"He can't make his mortgage payments, so how the heck did
he pay for it?" I asked.

With a big smile on his face, my friend answered, "with a
credit card."

Bingo!

There you have it...

A simple, surefire formula for staying broke...

Spend more than you earn, finance your deficit on your
credit cards (the higher the interest rate the better),
refinance your mortgage or use a home equity loan to pay
them off when you "max" them out (firmly believing home
values always go up, never down), then repeat the cycle.

By the way...

Under the circumstances, it kind of makes you wonder what
my friend's neighbor was planning to use the new mower for,
doesn't it?

Oh yeah...

I almost forgot...

After he lost his home a few weeks later, he sold the mower
to another neighbor for half of what he paid for it just a
few short weeks before.

Another proven financial strategy for staying broke you
should definitely keep in mind!

Surefire Way #3 - Always give less in use value than you
receive in cash value.

In his classic masterpiece "The Science of Getting Rich",
Wallace D. Wattles wrote:

"Give every man more in use value than you take from him in
cash value; then you are adding to the life of the world by
every business transaction."

Now...

That's just fine and dandy for those who want to get rich.

But, what if you want to stay broke?

No problem...

Here's *exactly* what you do...

Give every single person you accept money from *less* in
use value than you take from them in cash value; then
you'll be subtracting from the life of the world with each
and every business transaction...

Thereby *scientifically* guaranteeing you'll stay broke!

----------------------------------------------------
Tony Mase is a serious student of the works of Wallace D.
Wattles and the publisher of the "The Personal Power
Course: Ten Lessons in Constructive Science, Teaching You
How to Use Your Own Subconscious Energies for Health,
Prosperity and Personal Achievement" ebook by Wallace D.
Wattles... http://www.thepersonalpowercourse.com

The UK Mortgage Market (May 2008)

The UK Mortgage Market (May 2008)
In recent months, much has occurred in the mortgage market
and with such a lot of press/media coverage, this summary
may be helpful to people who wish to understand and 'take
stock' of the current situation.

What is happening?

The UK Mortgage Market is presently operating in a manner
that it is unlike any other within the past 30 years.

From a position of over-supply this time last year - with
intense competition among lenders - both new and
traditional - on criteria and on price - we've moved to a
state of under-supply, tightening criteria, widening lender
margins and, consequently, higher prices to the consumer.

Many lenders have even left the market - some large, some
small. Others have withdrawn from new lending and are
'sitting on their hands'. Even those with strong balance
sheets funded by deposits and savings accounts are
restricting their new lending in order not to damage their
operations or overrun their funding budgets.

The most obvious consequences of this situation are a
shortage of mortgage products, mortgage products being
withdrawn at very short notice, mortgage products being
re-priced upwards and generally more rigid lending criteria.

Why is this happening?

There are three key reasons for this happening:

Firstly, a lack of liquidity in the money markets - that is
money that would have been available for banks to lend to
each other. In the past (the distant past!) banks would
have used their deposits - money in savings accounts - to
fund mortgage and other lending. More recently, however,
mortgage lending has increasingly been funded by money
markets - borrowing from other banks - or from the sale of
'packages' of mortgages (Mortgage Backed Securities or MBS).

Unfortunately, because of the incidence of very high
mortgage arrears within MBS packages and, particularly,
those used to fund the American 'sub-prime' mortgage
market, banks have had to write off huge sums - billions of
dollars or Euro. It is estimated that 20% of lending for a
number of years in the USA has been to the 'sub prime'
market (the UK 'sub prime' market has been better
controlled and has accounted for only some 7-8% of overall
lending).

Major banks are now in a scramble to have less money market
funding for mortgages and other loans and more funding for
such lending by deposits - just like the 'old' days! And,
if a bank has surplus cash e.g. from a mortgage that is
being redeemed, it is not going to lend it to another bank
that may have financial problems hidden away in its balance
sheet. The interest rate at which banks lend to each
(LIBOR) is much higher than the Bank of England base rate
(3 month LIBOR is, at the time of writing, 5.8% compared to
the BOE rate of 5%) and, generally over the last few years,
3 month LIBOR has been running at only 0.15% to 0.25% above
the BOE rate.

In short, there is not much cash around to fund new
mortgage lending!

The second key problem is, simply, confidence. Lenders fear
that, as a result of all of the other problems in the
market, house prices will fall and that mortgage loan
performance - arrears - will worsen considerably. The
consequence of this is the tightening up of lending
criteria e.g. the disappearance of 100% mortgages - many
lenders are now insisting that potential borrowers have a
significant deposit. No lender wants to be the last one
left in the market with wide-open lending criteria.

The third issue is that of the lenders' mortgage processing
capacity. Lenders' administration systems can run into
serious problems if too much volume is taken on too quickly
and many have taken the decision to 'cool it' by adjusting
criteria or price (or both). In some cases, lenders are no
longer 'open' for new business.

Of course, the situation could become a self-fulfilling
prophecy - house prices will fall because buyers cannot
obtain mortgages to buy property. This possibility is
certainly a serious concern.

When will things 'return to normal'?

The short answer is that nobody knows! Indeed, it is quite
possible that we won't see a return to the sort of market
that we had in 2006 and 2007 for many years. Arguably, the
market then wasn't normal either - there were plenty of
aggressive new lenders with big aspirations who made the
market compete on risky terms with little or no profit
margin. Following their departure from the market, the
remaining strong lenders are rebuilding a more appropriate
approach to risk - taking lending criteria back to where we
were several years ago.

The hope in the market is that, perhaps, a year or so after
the 'credit crunch' started and when all of the banks have
gone through a whole new reporting cycle, all of the bad
news will be exposed and the write-downs and losses will be
history - albeit it, recent history. To date, we are some
nine months into the 'credit crunch' and, if the history of
previous financial crises is a guide, we are more than
halfway through the current squeeze.

If the confidence issue can be handled, we may see lenders
becoming competitive again and with a return to larger
lending appetites and willingness to grow.

Essentially, everything points to a slow and steady
recovery; there will still be tough times ahead with the
numbers of arrears/repossessions ticking upwards.

The Bank of England has made £50 billion available to
banks via a 'Special Liquidity Scheme' and this is a
deliberate move to free-up liquidity and confidence in the
market; this has to be considered positive news.

Are there any reasons to be cheerful?

There are some positives in the current situation -
fundamentally - the fact that the UK is not USA!

In the UK, employment is at record high levels (unlike the
early 1990's) providing a high demand for housing. At the
same time, there are not enough new homes being built in
the UK. The economic law of supply and demand means that
the housing market is strongly underpinned and is unlikely
to suffer a 'crash'.

Overall new lending is clearly down but demand remains
strong, in particular for 'buy to let (the rental market is
boosted at such times) and for re-mortgaging (rate
switching, debt consolidation and capital-raising). The
lending for house purchases is quiet and will remain so
until confidence returns to the market.

In addition, interest rates are on the decline and some
economists have predicted the possibility of BOE rate
becoming as low as 3.5% to 4.0% next year.

Whether falls in BOE rate will be followed by falls in
mortgage rates is far from certain - with sufficient cuts,
the cost of borrowing should become cheaper and, perhaps,
encourage more people back into the mortgage and housing
market.

Mortgage brokers remain the most favoured route for
consumers to obtain mortgages from lenders and the
proportion of mortgages arranged by brokers has increased
over several years as 'shopping around' has become more
common. Customers need advice more than ever and
independent brokers have a key role to play in this regard
- in order to obtain the best possible deals for their
clients and to protect their client-banks from other
brokers or lenders hunting for good quality business.

Your home may be repossessed if you do not keep up
repayments on your mortgage

----------------------------------------------------
Author of a number of financial articles published globally.
http://www.afpmortgages.co.uk

How Do You Locate Mortgage Lender Online

How Do You Locate Mortgage Lender Online
Some people search the internet to find a mortgage lender
so they can take advantage of all the resources the web has
to offer. Many prospective buyers find the internet has
the most helpful tools and information to be accessed at
one time than any other resource. Hundreds of lenders now
provide online services by way of websites. There are also
many lenders which are exclusively web-based.

Mortgage lenders, who operate online, offer all the same
services and benefits that traditional mortgage lenders do.
You can do all your business online in your own home,
instead of traveling to a different location to consult
with a broker in person. All you need to do is to have all
the relevant information to fill out an electronic
application form, which you can obtain from the prospective
lender. You need then to fill out the loan form to receive
a loan quote. A huge advantage to using the internet
to request several different quotes for loans is that you
will not feel obligated to choose any certain lender's
offer. You are applying with several lenders so you can be
selective and sort of shop around for the best terms for
your circumstances.

There is some vital information you should have on hand
before you begin your search online for prospective lenders
or to get quotes from them. You will have to reference
this material to fill out the electronic applications.
Examples of this information may include past bank account
statements and past tax records. You also might want to
have the loan amount and the associated costs of the loan,
plus the estimated down payment amount at hand before you
start requesting different quotes.

If you want to request a quote from a lender on the web,
you will need to go to a site and fill out the quote
request form correctly and completely. Questions about the
requested loan amount, your income, and your credit score
will be asked. When this information is entered into the
mortgage quote calculator, you can expect to receive a
quote within a matter of minutes.

The big advantage of the internet is that you can receive a
quote within making the request for it. This greatly
increases the speed with which you can collect a large
number of mortgage loan quotes. You can compare several
quotes and start to narrow them down to the best offers.
You can use the best offers on the list and then fill out
more forms that offer more detailed accounts of the
different factors which will contribute to the total cost
of your loan. You will then have a better opportunity to
choose the best offer among the loan quotes.

Once you have chosen your online mortgage lender, you can
quickly go through the process of obtaining your loan. In
no time at all, you could be walking across the threshold
of your new home and into a future filled with wonderful
family activities and new memories to share.

----------------------------------------------------
Gary Milton writes for the mortgage search and comparison
sites, http://www.rebuild.org/mortgages.html and for UK
residents, http://www.glitec.org/mortgages/

Reward Credit Card: Tips To Reward Your Wallet Not The Lender

Reward Credit Card: Tips To Reward Your Wallet Not The Lender
Credit card holders love to obtain rewards credit cards.
And why not? Rewards credit cards give bonuses and
privilege to its members by simply using credit cards on
their purchases. However, not all rewards credit cards are
suitable for all types of people. Using the wrong types of
credit cards can be more of a disadvantage rather than an
advantage if not correctly used. Thus, as a consumer, you
need to make sure that you'll get the one suitable to your
needs and lifestyle.

All rewards credit cards require its users to gather points
in order to get a bonus or an incentive. Points are
collected with each time the card holder makes a purchase
using his credit card. Different credit cards give
different points equivalent to every dollar of purchase.
When the card holder has collected the minimum points
needed, she can claim his bonus or reward.

Credit card rewards come in different packages. There are
credit cards that especially provide free travel
privileges, gas rebates, cash rebates on purchases, cash
back rewards, discounts, freebies and a combination of all
these bonuses. Hence, you can select your preferred type of
reward that you can most benefit with.

An important reminder for rewards credit card holder is to
select the card that matches their spending. For example, a
frequent travel miles card may not be best for those who
only use their credit cards once in awhile. It will usually
take a huge number of mileage points before you can receive
your travel reward. Thus, you may need to make a very large
amount of purchase before you can collect the minimum
number of mileage points required to travel.

Those in business generally make large purchases so they
can easily collect mileage points with a travel rewards
credit card. On the other hand, for those who only use
their credit cards for their personal needs can perhaps
best benefit from a gas rewards credit card of a cash back
rewards credit card. This is because these cards usually do
not entail very large amounts of purchases before the card
holder is able to redeem rewards.For instance, with a gas
rewards credit card, you can get a 3% to 5% rebate on your
gas purchases. Imagine how much money you'll be able to
save in an entire month by adding up all the rebates you
earn for this whole period. Also, some credit cards award
1% up to 10% rebates on all purchases while others use a
point system to give rewards. There are credit cards that
give 1 point for each dollar spent on your account while
other card issuers give double points for each
dollar.Obviously, you need to choose your rewards credit
card very carefully. Don't forget to review all terms and
conditions that apply to that specific rewards credit card
you're applying for. Furthermore, bear in mind that the
important thing with owning a credit card is to pay your
balances on time. Otherwise, you may lose your privilege of
redeeming your rewards and even worse, you can be facing
bad credit in no time at all.

----------------------------------------------------
Ann Wilson is the head writer of RewardCreditCardSite.com.
This resource provides consumers with valuable reviews and
information on the best credit card reward programs. Its
main objective is to help people to take advantage of
credit card rewards and start earning reward points. Visit
http://www.rewardcreditcardsite.com for more info.