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Ability to grant a lien against mortgage free real estate property in exchange for borrowed funds.

VirginiaLien on Funds

I have a personal emergency needing funds of $40,000 and I am unable to borrow money from banks since my credit score is in a poor status. I have a prime piece of real estate, a single family home, up for sale for $399,000 and the only loan outstanding on this property is a $40,000 home equity line of credit. The results from any sale of this property will more than cover the repayment of borrowed monies. If I am able to find someone willing to loan me the funds I need,, can I willing get a notice of lien drawn up and filed for the repayment of these borrowed funds as the time of the property sale if not sooner.

1 reply

Feb 18, 2020
A party can generally provide a voluntary security interest in his or her property to secure the repayment of a debt. When the collateral property is real estate, the security interest is generally a mortgage or a "deed of trust." A voluntary lien against personal property can also be given through a security agreement like a UCC lien. Because there are significant potential consequences of granting a voluntary security interest in property, it is best practice to enlist the assistance of an attorney to draft or at least review the documents at issue.  
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