How to Stop Foreclosure and Protect the Equity in

Your Home In One Day!

There isn't much you can do to stop foreclosure on your home, right?

Wrong!!!

A check on the internet and a trip to a real estate lawyer will seemingly confirm this. But
actually, there is one thing you really can do as a common law remedy to actually stop
a foreclosure.

But time is your enemy, if your house payments are more than a month behind, your
lender has probably already started foreclosure proceedings.

If your home is foreclosed, you not only loose your home – but also everything (your
equity) you have put into it; including your payments and improvements.

Home equity is the value of a homeowner's unencumbered interest in their property,

that is to say the difference between the home's fair market value and the unpaid
balance of the mortgage and any outstanding debt over the home. Equity increases as
the mortgage is paid or as the property enjoys appreciation.

A person with excellent credit history can obtain a Home Equity Loan (sometimes
abbreviated HEL). A Home Equity Loan is a type of loan in which the borrower uses the
equity in their home as collateral. These loans are sometimes useful to help finance
major home repairs, medical bills or college education. A home equity loan creates a lien
against the borrower's house, and reduces actual home equity.

Home equity loans are most commonly second position liens (second trust deed),
although they can be held in first or, less commonly, third position. Home equity loans
come in two types, closed end and open end.

Both are usually referred to as second mortgages, because they are secured against the
value of the property, just like a traditional mortgage.

If you are a home owner, your equity in the home has increased with all payments and
improvements you have made on your home since you signed mortgage papers and
moved into your home. There is a way to protect this equity, and even stop a
foreclosure!

Clouds On Your Title

When you bought your home, at closing time, the seller was asked to provide
good and marketable title to the property, a title which is free of any liens or
judgments, or "clouds on the title."
A lien is a claim to property for the payment of a debt, and the lien holder could
foreclose on the property if the debt is not paid off. Liens can be generally be
removed by the payment of the amount owed. This payment can occur before
the closing takes place, or at the time of closing.

There are several types of liens, all of which could cloud the title and prevent the
seller from conveying marketable title to the buyer. A mechanic's lien, or a
construction lien, is a claim made by contractors or subcontractors who have
performed work on the house who have not been paid. A supplier of materials
delivered to the job may also file a mechanic's lien.

It is possible, and takes only a few minutes, to file a lien on your own property to
protect the equity investment you have made in your home.

In some states, contractors and subcontractors must notify the home owner
when they intend to file the lien, but in other states they can file the lien without
any prior notification to the owner. An owner could face a mechanic's lien if his
contractor fails to pay a subcontractor or a materials supplier. To insure that your
property is free of any mechanic's liens, an owner should obtain a release of lien
form signed by all subcontractors and material suppliers before making the final
payment to the contractor.

Another type of lien which may occur is one related to a divorce. Often in a
divorce, one or the other spouse may be awarded the right to live in the house.
When that spouse sells the property, for instance, the ex-spouse may be entitled
to half of the equity. If things don't go as they should, the ex-spouse could file a
lien for his share of the sales proceeds.

There are liens which exist in connection with condominiums and a homeowners
association dues. At closing, the title or escrow company will request a certificate
of payment from the homeowners association to be sure that all due and
assessments have been paid and are current.

Some states allow a lien to be placed on property of divorced parents for unpaid
child support payments. This is a lien which would have to be paid off before the
property could be sold. Court judgments for unpaid debts, such as credit card
judgments or unpaid legal fees, is a type of lien which would have to be paid and
removed before closing.

Clouding Your Own Title,

things a lawyer or banker won't tell you
If you file a lien on your own home, you have preserved your right to the money
and time you have invested in your home.
You don’t have to file a lawsuit, or even see an attorney. All you have to do is
complete a lien form, have it notarized and then have a clerk file it in the property
records of your home county. You can even file this lien with the County
Recorder of your county through the mail. Of course you have the right to
remove this lien at any time; but while in effect, it protects your investment.

If bad times come and your mortgage holder decides to foreclose on your home
(you have declared a homestead, haven't you?) due diligence will insure that he
find this lien -- the cloud on the mortgage holders lien you placed on your own
property -- which you have filed among the property records of the county.

Your "personal" lien will have to be paid off (to you) if the property is foreclosed --
returning all your investment to you, even though you would have to move.

If the present value of the home is so low that foreclosure would mean a loss
when the mortgage holder sells the foreclosed property and pays off your lien to
you -- there will just be no foreclosure.

Cloud on Title: An outstanding claim or encumbrance which, if valid, would affect

or impair the title of the owner of a particular estate, and on its face has that
effect, but can be shown by extrinsic truth to be invalid or inapplicable to the
estate in question. A conveyance, mortgage, judgment, tax-levy, etc., may all, in
proper cases, constitute a cloud on title. The remedy for removing a cloud on title
is usually by means of an action to quiet title. Source: Black’s Law Dictionary.

Unlike acquisition through a deed of sale, a quiet title action will give the party
seeking such relief no cause of action against previous owners of the property,
unless the plaintiff in the quiet title action acquired its interest through a warranty
deed and had to bring the action to settle defects that existed when the warranty
deed was delivered.

One has to be careful about talking about quiet title actions in the context of
registration systems. Quiet title actions really have no applicability where a
registration system is in place, having been wholly replaced by the registration
statutes. Quiet title actions derive in common law jurisdictions from a common
law equitable cause of action by the same name.

Construction or M&M Liens are valid liens, made for the improvement of private
and commercial property. An action to “quiet title” would likely have little effect on
a home owner’s equity value lien in his homestead!!

Construction Liens Definition

A lien is the right to retain the lawful possession of the property of another until
the owner fulfills a legal duty to the person holding the property, such as the payment of
lawful charges for work done on the property. A mortgage is a common lien. The right of
lien generally arises by operation of law, but in some cases it is created by express
contract. Liens that arise in construction situations include construction liens, contractor
liens, mechanic liens, attorney liens, architect liens and other liens applicable in your
state.
By virtue of express statutes in most states, mechanics and material men or
persons who furnish materials for the erection of houses or other buildings, are entitled
to a lien or preference in the payment of debts out of the houses and buildings so
erected and to the land, to a greater or lessor extent, on which they are erected.

In some states, a claim must be filed in the office of the clerk of the court or a suit
brought within a limited time. On the sale of the building these liens are to be paid pro
rata. In some states no lien is created unless the work done or the goods furnished
amount to a certain specified sum, while in others there is no limit to the amount. In
general, none but the original contractors can claim under the law; however, sometimes
sub-contractors have the same right.

The following is similar to a Home Equity, Construction

or M&M Lien. Although you will not need any help, any
legal secretary or paralegal can help you complete the
lien – though they will likely have never seen a lien used
in this manner before.

Explain to them that you are exercising a common law

right to protect your equity in this property – just like a
contractor, plumber, or electrician who worked on your
home might do.
 Prepared by, recording requested
by and return to:

Name:

Company:

Address:

City:

State: Zip:

Phone:

Fax:
---SPACE ABOVE THIS LINE FOR RECORDER'S USE---

CLAIM OF LIEN – INDIVIDUAL -- RECORD OWNER

(N.C. Gen. Stat. § 44A-12)

(1) Name and address of the person claiming the lien:

________________________________________________________________
______________
______________________________________________________________________
________
(2) Name and address of the record owner of the real property claimed to be
subject to the lien at the time the claim of lien is filed:
______________________________________________________________________
________
______________________________________________________________________
________
(3) Description of the real property upon which the lien is claimed: (Street
address, tax lot and block number, reference to recorded instrument, or any other
description of real property is sufficient, whether or not it is specific, if it reasonably
identifies what is described.)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________________
(4) Name and address of the mortgage holder whom the claimant contracted
for purchase of above described property: _____________________________
______________________________________________________________________
________

(5) Amount of down payment to mortgage holder and all closing costs
involved:
______________________________________________________________________
________
(6) Dates upon which labor or materials were furnished for improvements
upon said property by claimant:
______________________________________________________________________
_______
(7) General description of the labor performed or materials furnished and the
amount claimed therefor:
______________________________________________________________________
_______
______________________________________________________________________
________

_______________________________________
Lien Claimant

Filed this ___ day of ______________,

200_

STATE OF NORTH CAROLINA §

§
COUNTY OF _______________ §

I, a Notary Public, do hereby certify that _________________________ (here give

the name of the grantor or maker) personally appeared before me this day and
acknowledged the due execution of the foregoing instrument. Witness my hand and official
seal.
This the ________________________ day of ____________________, 200_.
(Official Seal)

______________________________________
Notary Public
Printed
Name:________________________
My Commission Expires:_______________
 AFFIDAVIT TO FIX CLAIM OF LIEN

STATE OF NORTH CAROLINA §

§
COUNTY OF _______________ §

BEFORE ME, the undersigned Notary,

_______________________________________ [name of Notary before whom affidavit
is sworn], on this _________________ [day of month] day of _________________
[month], 200_, personally appeared ____________________________ [name of
affiant], known to me to be a credible person and of lawful age, who being by me first
duly sworn, on ________ [his or her] oath, deposes and says:

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________________
[set forth affiant's statement of facts]

__________________________________
[signature of affiant]

__________________________________
[typed name of affiant]

__________________________________
[address of affiant, line 1]
__________________________________
[address of affiant, line 2]

Subscribed and sworn to before me, this _________________ [day of month] day of
_________________ [month], 20____.

[Notary Seal:]

______________________________________
Notary Public
Printed
Name:________________________
My Commission Expires:_______________
 THE ABOVE “STATEMENT OF FACTS”
SHOULD INCLUDE AN ACCOUNT OF DOWN PAYMENTS, MORTGAGE PAYMENTS
CLOSING COSTS, AND IMPROVEMENTS TO YOUR PROPERTY

-o0o-

PROCEDURE FOR RECORDING YOUR CLAIM OF LIEN

1. Complete the Claim of Lien form, the Affidavit to Fix Claim of Lien, and have them
notarized. The forms must be either produced from a word processor or printed legibly in
black ink. Text cannot extend beyond the one inch margins on all sides of the form. An
additional recording fee could be applied if the form does not meet these requirements at time
of recording.

2. Sign three copies of the above in the presence of a Notary Public.

3. Take or mail the completed documents to the County Recorder in the Property Records of
your county.
4. If you mail the instruments to the County Recorder, you must call him on the phone and
ascertain the filing fee for filing the lien. You must include this fee and a stamped, self
addressed envelope so that the County Recorder can mail you back a FILE STAMPED
COPY OF YOUR LIEN PAPERS.
5. Continue to make payments as you are able. You have now protected your equity; and in
all probability, stopped foreclosure.