Home>Levelset Community>Legal Help>if i place a lien on a client, can they get a morgage even though there is a lien or do i have to go through a lawyer to enforce it
if i place a lien on a client, can they get a morgage even though there is a lien or do i have to go through a lawyer to enforce it
will it automatically be enforced when they try to get a mortgage on the property that i placed a lien on?
1 reply
Oct 17, 2017
Generally speaking, a valid mechanics lien on a property makes it very difficult for the property owner to obtain a mortgage or refinance the property. This is because the mechanics lien is a security in terse in the property just like a mortgage, and since the mechanics lien is already on the property, it would have priority over the mortgage in the event an enforcement/foreclosure action is initiated (whether by the lien claimant or by the bank giving the loan).
While a bank is free to lend to a property owner with a lien on the property if desired, they generally do not do so because their protected position is modified and subordinate to the lien holder.
However, it's important to note that a mechanics lien will expire if not enforced through a lawsuit within a certain period of time. The deadline to initiate an enforcement action in New York may be extended through lien extensions, but eventually an enforcement action will need to be initiated or the lien will expire and become worthless and unenforceable. Since the enforcement/foreclosure lawsuit is a full-blown lawsuit, it is generally either required or best-practice to hire an attorney to help you out.