Zombie Loans Resurfacing
We’re seeing this more and more with vehicles, real estate, even lawsuit judgments, where an old debt, an old lien, is popping up years in the future. It may have been a lien that was supposedly refinanced or maybe adjusted. It may be something that’s supposed to be waived or even erased. Sometimes these loans had written loan modifications. But what’s happening is now that the economy is better, inflation has raised up people’s salaries. A lot of creditors and credit agencies are now chasing down old loans, and they call them zombie loans because they were supposed to be dead; now they’re coming back to life.
Example: Zombie Mortgage Case
Here’s an article about a woman in California who had a mortgage on her property that was supposedly mortgage modified, cleared, released, but now it’s coming back. The reason this happens is because the loan or lien or record was never removed from the official records. For example, on a vehicle title, you’re going to see on any vehicle title there’s a place for a lien. And if you have a lien that is charged off, a write-off, cleared, unless the Department of Motor Vehicles, the official title record, is adjusted to show that the lien is no longer valid, it doesn’t matter if you paid it. It doesn’t matter if it’s a charge-off. The government still has it down in their system as valid. They don’t know that it was a charge-off. They don’t know you paid it until the creditor tells them.
Zombie Mortgages and Government Records
Same thing with a zombie mortgage. You could pay it off. It could be adjusted. It could be cleared. It could be released by statute. Until there’s a document that clears it from the official land records, the government records, it didn’t really happen yet. So what you want to do is anytime you have a prior loan or lien or judgment, even in court, you want to file for a lien release or release of mortgage, and you want to get that filed in the record so that it clears it off of anything official somebody could look at.
How to File a Lien Release
How do you do that? Well, you can check out our website below, lienrelease.com. It’ll give you instructions. But basically, what you want to do is you want to prepare an official lien release package and send it by mail. Don’t do email, don’t do phone, don’t do Facebook, don’t do any electronic means. You want to send it in an envelope, printed, to the actual lien holder and only send it to the lien holder as it’s listed in the records. Don’t send it to a collection agency or somebody that bought them out or any other affiliate. Send it only to the name and address on the official lien.
What to Do If the Company is Out of Business
And you might say, “Well, that company’s out of business, that company’s gone.” Doesn’t matter. Your video will be back in 8 seconds. In the meantime, remember you have access to live, one-on-one consultation, undivided attention of a licensed certified expert in this subject and many others. We want to listen to your story. We want to hear your questions and give you expert advisement of your options. We want to tell you what we know about your situation and what options you have. Now, back to your video.
Legal Steps for Lien Releases
You want to send it there. Send it to their registered agent and see what happens. If it’s not released, then what you do is you file it as a court order petition to have the court release it. Again, we’re not attorneys; we’re not giving you legal advice, but it’s very important to follow those procedures to have the record officially updated. Because until it’s updated, as far as anybody knows, it’s still a valid lien or a valid mortgage or a valid judgment. You want to take those steps because if not, it could come back to haunt you, like this woman here, who has all of a sudden somebody coming back trying to collect money from you.
Real-Life Example: Zombie Debt Case
In fact, the article says right here, she had never heard of State bridge Company until January, received a letter stating she owed them $180,000, needed to make an initial payment of $50,000, or lose the house, an old second mortgage she paid off years ago, right? That’s what happened. And it could be a car loan that’s a charge-off, it could be a car loan you paid off, it could be an auto lease, it could be a judgment that’s expired from a court case. You want to get it documented because until the official record is updated, it’s still valid.
Importance of Updating Government Records
And even though you might say, “Well, I paid the bank, I paid the lien, or it’s a charge-off,” that doesn’t necessarily get to the government record. That’s just between you and the bank. For example, when you pay off a car, you pay that last payment, the bank gets the last payment. Normally, what they do is they take the title they have in their drawer—the title certificate, right?—they sign it “Paid,” and they mail it to you, but they don’t update their government records.
Why Banks Don’t Update Records
And the reason they don’t is because it costs money. It costs money to file it, it costs money to prepare it, so they figure, “We’ll save some money. Just send them the title mortgage release.” They figure, “Well, they paid off their mortgage, or it’s a charge-off, or it’s a modification; we’ll just send the information to the borrower, but we won’t update the title records because that costs money too.” That could cost $150 or $200 for what’s called a bring-down or an update. And if they have to do that thousands of times every month, that could be a quarter of a million dollars a month, many millions of dollars a year. They figure they’ll save some money by not filing in the official records.
Consequences of Un-updated Records
But now, it could be 10 years later, and it could come back to haunt you. So get these lien releases—at least request them. If the lien holder doesn’t respond, or they don’t handle it the right way, then you can take the next step with the magistrate.
