Why Is There a HUD Lien on My House?

Buying a home is an exciting prospect that takes time, effort, and persistence. But when you find that perfect place to live, it can all be worth it. So, you go through the home buying process with your real estate agent, only to discover that .

It can be confusing and upsetting to discover a lien on the home that you will potentially purchase, mainly because that information often doesn't come to light until late in the home buying process. If you discover a HUD lien attached to the house of your dreams, you may be tempted to give up and continue your search. However, DoNotPay is here to make sure liens don't get in the way of homeownership. Our Remove A Lien product can give you the tools you need to fight against a HUD lien and earn some peace of mind through the rest of the buying process.

What Is a Lien?

The first thing to understand is what a lien entails. A lien is a legal claim against a property or asset by a creditor as a way to secure a debt. If the debt isn't paid satisfactorily, the creditor that financed your loan has the right to seize the assets listed under the lien and liquidate them for compensation. In the case of a home loan, a lender can legally sell the house from under the debtor.

A home lien may be a result of many things:

Failure to pay taxes	The government can place a lien against your home as collateral. This is called a tax lien and is an involuntary lien.
Debt taken to buy a home	This is called a mortgage lien and is voluntary. If you default on the mortgage, the bank can place a lien against your home, seize it and sell it to pay off the debt.
Failure to pay	Failure to pay someone who did renovations or remodeling your property, unpaid suppliers, or workers. This group of people can take an involuntary mechanic's lien against your property.
You owe child support or spouse alimony	The court can place a lien against your property to ensure these payments are made. Like tax liens, filing bankruptcy does not discharge this kind of lien.

You should also know that it's not always bad to have a lien attached to a house. A lien is usually a standard part of the loan agreement if you are paying a mortgage. Liens are used as collateral to give the creditor a form of recourse if you cannot pay back your home loan. These liens are referred to as voluntary liens.

Involuntary liens occur when a creditor seeks legal recourse for an unpaid debt when a borrower defaults on a loan. These liens are most often placed by a government agency as part of a statute or a court as part of a judgment.

In addition, liens fall under two categories: specific and general.

Specific liens are attached to one particular asset and include house or car liens.
General liens allow a creditor a claim to any asset necessary to secure a debt, including your home, car, furniture, electronics, and bank accounts.

Why Would a House Have a HUD Lien in Place?

The Department of Housing and Urban Development (HUD) provides affordable housing for low and middle-income individuals and families. They can do this by offering loans insured against default by the Federal Housing Administration (FHA). If a person cannot repay the loan, the FHA will foreclose on the house and file for a lien.

The process is similar to a bank foreclosing on a house, but there is one exception. The FHA offers a pre-foreclosure period during which a person can sell the house. These are often short sales due to a lack of enough equity in the home for a regular sale, but it is possible to sell a house with an active FHA loan attached to it. And, unlike selling a car with a lien attached, the FHA lienholder doesn't need to be removed from the title of the house before the sale.

What Can You Do if You Want to Purchase a House With a Lien Attached to It?

It's vital to work with your real estate agent if you discover that the house you wish to buy has a lien attached to the title. You have two options:

If it isn't a tax lien, your real estate agent and a real estate attorney can work to identify the liens and negotiate with the creditors to pay them off before the purchase.
Alternatively, you could attempt to reduce the selling price by a corresponding amount then pay the liens off after the purchase.

DoNotPay Can Help Remove Liens From the Title of Your House

If you purchase a , even if you manage to pay off the loan amount, the lien will continue to show up in reports and checks made on the house.

Fortunately, DoNotPay can help resolve this issue, make the negotiations more manageable, and even get the lien removed from your property. All you have to do is follow a few simple steps.

Search for remove my lien on DoNotPay.
Start our Remove My Lien product.
Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.

Once we have the necessary information about the lien you're facing, we'll send a letter to the creditors to renegotiate the terms of the lien to make the home buying process smoother. We can also help you fill out a release of lien form to remove the HUD lien from your property's record. Not only that, but DoNotPay can work to remove car liens and state tax liens from your record.

What Else Can DoNotPay Do for You?

Dealing with liens during the home buying process is just one of many financial and legal issues you could potentially encounter. Sometimes, these problems seem insurmountable, with large amounts of time and money needed to solve them. That's why DoNotPay is here. Our app is designed to help you by giving you the tools you need to fight against corporations and bureaucracy.

With DoNotPay, you will have the ability to:

If you have a financial or legal problem and don't know where to turn for help, sign up for DoNotPay. The process is as quick and effective as what we do: