Foreclosure Investing: Judgment Liens
August 25th, 2008 by 
Joseph Smith
Considering that current market conditions have made it favorable for foreclosure investing, buyers and investors alike should do their homework in order to determine whether or not a property is worth buying. The most important thing that you should check is whether the property has a judgment lien attached to it.
Simply put a judgment lien is a claim against a property that comes with an Abstract of Judgment. This judgment has been issued by the court so that the creditor can finally collect. The only way this particular lien can be satisfied is when the creditor will file and record a Satisfaction of Judgment.
If the distressed homeowner decided to refinance, the loan proceeds will be first used to satisfy the judgment lien. Lenders will usually require this as a condition of the loan.
On the other hand, if a buyer is purchasing a pre-foreclosure property with a judgment lien attached, it should be understood that the lien should be satisfied by the buyer in exchange for the Satisfaction of Judgment.
In order to convince the judgment creditor to agree, the buyer should emphasize the speedy transaction and easy payment. Most creditors agree with the buyer’s offer to satisfy the judgment lien since the lien could be lost in the event of foreclosure filing or bankruptcy.
For these reasons, foreclosure buyers and investors should not feel wary about buying repossessed homes with judgment liens. You will only need to negotiate with the creditor in order for the lien to be released.
Keep in mind that judgment liens usually expire after 10 years. If the lien is quite old, you should probably wait for the creditor to renew it first before making a move. But as an investor, you will have to take this lien into consideration when making a decision to buy a foreclosed property.
