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Sears holding up title on mortgage refi


tycin1
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I am 2 years post-bk Chapter 7. When I filed, I was being sued by Sears. My bk attorney took care of it and it was included in bk (I have it on my bk schedule and d/c papers). I am due to close on a mortgage refi on Dec. 12. I just got a call from my mortgage broker asking if I was sued by Sears. He said that it is holding up the title, and I may have to pay them before I can close on the mortgage refi. How can this happen? I have the d/c papers that clearly shows that this was discharged? I am worried.

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Could someone PLEASE help me? I have a mortgage approval. I thought everything was good until they called and said that Sears is showing up and preventing a clear title. Did my attorney make a mistake? He did include them in BK, was there another motion that he missed filing? I am very upset.

I have performed a search and cannot find the answer to this question.

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Sears is notorious ... and lost a lawsuit against them ... for funny biz they've pulled in BK cases. Have you checked your credit reports and, if so, do they appear on any of them? Ask your mortgage broker where he got the information about the alleged lawsuit, have him fax or e-mail you any documents he has on it, etc. If he's got a court document with a case # on it then you need to call or visit the court and find out what's going on. As mentioned above, your BK lawyer may also be able to help. Don't panic. If your Sears account was discharged in the BK you'll be fine.

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Thanks for the reply Thomassl. I did call that atty office. The girl that answered the phone said that she would send someone to pull the file out of storage, but I shouldn't have to pay this to close this loan. I haven't heard back from her. I have no idea why Sears would be holding up the title work. This came as a surprise to me and the broker said that I may have to pay it to close the loan. It is $3700. I can't pay that right now and do not understand why he would tell me that.

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Sears is notorious ... and lost a lawsuit against them ... for funny biz they've pulled in BK cases. Have you checked your credit reports and, if so, do they appear on any of them? Ask your mortgage broker where he got the information about the alleged lawsuit, have him fax or e-mail you any documents he has on it, etc. If he's got a court document with a case # on it then you need to call or visit the court and find out what's going on. As mentioned above, your BK lawyer may also be able to help. Don't panic. If your Sears account was discharged in the BK you'll be fine.

It is not on any of my credit reports. I haven't heard back from the attny or broker. It was definitely discharged in bk. Thanks for making me feel better. I have been so upset about this that I am having a hard time concentrating on my work. Maybe the broker made it sound worse than it is......

ETA: broker said that this is coming from the mortgage title office.

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Sounds to me like the BK attorney didn't do ALL of his job. It also sounds like Sears did manage to get a judgment and a lien against your property. Unless and until that lien is released, by Sears, you're in a tough spot. The judgment should have been vacated thru a separate process and the lien removed once the judgment was nullified. Ordinarily they cannot make you pay a discharged debt, that is a violation of the BK law, BUT, with a lien still in force, they can make you pay it - which is why they go for liens in the first place.

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Thanks, nolo. I have put in 2 calls and of course, they have not called me back. It is not too late for me to back out of the mortgage refi. My rate is at 12.5% (ARM and going up), and my new loan would be at 6.75%. I was really excited about it until the title didn't come back clean. I am blindsided and upset. I have had a hard time concentrating on my work because I don't understand how the heck this happened. It is not on my CR, I never got notification that they had a judgement of any kind, and I showed my bk atty the paperwork and he said he would handle it.

My mortgage broker says that it is no big deal to just pay them at closing. Well.......IT is to me.

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Do not let your broker coerce you into paying this. If it was included in the bankruptcy, you are not liable for it. Once you filed for bankruptcy, the automatic stay shot down any suit Sears may have filed. Unless they got a judgment before you filed your BK case, they are in serious doo-doo. Bankruptcy judges do not like it when a creditor tries to do an end-run around their court proceedings.

Not only that but by placing an illegal lien on your property you may be able to sue them for the sum total of the interest you would have saved under the new loan terms as your damages. And that's gonna be a lot of money.

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Thanks, nolo. I have put in 2 calls and of course, they have not called me back. It is not too late for me to back out of the mortgage refi.
Sounds like your mortgage broker is only worried about his/her commission, s/he is not worried about you. Explain calmly to your broker that you do not believe you owe this money to Sears and that you will need to put the refi on hold until you get it straightened out. Do not, not, not give one penny to Sears to which they're not entitled and do not let your broker pressure you. Trust me...I went through something very similar with my 2002 refi. I was in a panic and let an unscrupulous mortgage broker lead me around by the nose. I learned the hard way and paid a penalty in the form of big bucks to a JDB. One of the reasons I post on this site is to keep the same thing from happening to anyone else if I can help it. Take a deep breath and stay on your BK attorney with phone calls regarding the Sears account (followed up with correspondence so you have something for your files). Sure, $3750 is no big deal to the broker, because you're the one who would pay it, not him/her. Phooey on that.
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Thanks everyone so much for your replies! I would be lost without your advice.

The broker called and told me, "Worse case scenario is paying it at closing, then you can sue Sears". Then he told me not to worry about it. The broker DID tell me that if the closing goes past the 12th, he will have to pay a quarter of a percent to extend the lock on the rate.

I am worried about it. Being a single mom with my own home, an extra $3700 is not a small amount.

I am going to take everyone's advice and head down to the courthouse tomorrow and find out about this lien or whatever it is on my title. The attorney that I used is very hard to get a call back from. I have been through this before with his office. You know, after they get your money, you really aren't their priority anymore.

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If they won't respond to you, get yourself down to the BK lawyer's office and park your butt there until you get some kind of reponse. It's easy to ignore phone calls and letters, it is NOT easy to ignore you when you're staring them in the face !
Agreed! And if they still give you grief, make a friendly call to your State Bar Ethics department about them.:evil: You don't want to have to be in a position to sue Sears, and spend time and money doing so, if you can get it cleared up ahead of time. Ask your mortgage broker if he wouldn't mind fronting you the $3750 if and until you win your lawsuit against Sears. J/K, of course, but would love to hear his stuttering response. Hang tough.
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I found out that I do in fact have a judgment from the year 2000. It is for a Sears account. The judgment is $3651 + $1217 atty fees. That is almost $5,000! I can't believe that the mortgage broker told me it is no big deal and to just pay it at closing. This was IIB in 2001 and discharged in 2004. The bk atty office said that they have contacted the atty office that handled the Sears judgment in 2000. She said that she is asking them to release the judgment, but she doesn't know how quickly they will do this.

What should I do? Wait for the release by the atty office that got the judgment or file a motion to vacate based on bk? Will the atty office that got the judgment in 2000 even be willing to release this?

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They'd better be willing to release it. If they don't, you may have damages against Sears.

As for your mortgage broker, this one's working for their fees, not for you, imho. You might want to point out (I'd do it Very Mean, but that's me) that it'd be a lot easier to pay higher points (or whatever) if they weren't trying to get you to pay that money to someone else instead....

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Whoo Hoo!! I found this in the Texas Property Code about judgments that were IIB:

§ 52.041. APPLICATION OF SUBCHAPTER. This subchapter

applies to a judgment and judgment lien for which an abstract of

judgment or judgment lien is recorded on or after September 1, 1993.

Added by Acts 1993, 73rd Leg., ch. 313, § 3, eff. Sept. 1, 1993.

§ 52.042. DISCHARGE AND CANCELLATION. (a) A judgment is

discharged and any abstract of judgment or judgment lien is

canceled and released without further action in any court and may

not be enforced if:

(1) the lien is against real property owned by the

debtor before a petition for debtor relief was filed under federal

bankruptcy law; and

(2) the debt or obligation evidenced by the judgment

is discharged in the bankruptcy.

(B) A judgment evidencing a debt or obligation discharged in

bankruptcy does not have force or validity and may not be a lien on

real property acquired by the debtor after the petition for debtor

relief was filed.

According to the above property code, I don't need Sears. I am going to the courthouse tomorrow to talk to them. It is odd that the title company & the bk atty office didn't know this.

So, if any of you are in Texas and have a judgment IIB and don't know what to do, here it is!!

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I close tomorrow, but not without going through a major hassle for the last 5 days! No one at the County Clerk's office at the courthouse OR the people in the title office believed that a judgment discharged in BK trumps a judgment on file with the county clerk. It wasn't until it went to the attorney that works for the title company that all of this was cleared up. The attorney took their time to look at it too. BUT, it is all taken care of now. WHEW. Thank goodness. <nervous breakdown over>.

When I was researching this online, I noticed that several states have a form that can be filled out to clear up a post-bk judgment. The form is submitted to the county clerk with the bk discharge papers attached and they will remove post-bk judgments. Too bad Texas doesn't have something like that. When I asked about it at my local courthouse, they stated that the jugdment could only be released by whoever filed it in the first place. I know that is not right according to Texas Property Code, but I guess I would have to fight them on it.

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