I just got a call from an attorney claiming to have a way to keep lenders off a homeowner’s back for up to 36 months. The process involves the use of a corporate entity like a c-corp or an LLC. The homeowner would be the “owner”/shareholder of the corporation, but the attorney would be the officer of record.
The new corporation would then put a lien (UCC-1) on the property that is about to be foreclosed. He didn’t give details of the process after that. It sounds like an illegal scheme to me, but has anyone heard of this? The attorney is charging $900 to form the entity and record the lien. He claims that it can stall the foreclosure of the house for up to 36 months.
I thought that a UCC-1 is only applicable to commercial property or activity. Can this be used to encumber a primary residence at all?
doesn’t sound right to me. When a property goes to foreclosure it doesn’t matter what liens are on it, it still goes. After auction all liens are abolished. After the auction the property is sent to an asset manager who then orders title on the property at the same time they list it with an agent.
So I don’t see how putting a lien on the property before hand does anything other than put a few bucks in an attorney’s pocket…but I don’t know what state you are in either.
I would contact the state bar and ask them. Give them the attorney’s name and explain the situation. If there is something to it then it might be worth a shot if you need the auction put off that long. IF it worked for 20+ months, and that’s a big IF, then why would you not want to live for damn near three (3) years for only $900? I would. That’s a lot of rent / mortgage money.
But check with the state Bar association first and make sure this guy isn’t a crook trying to steal your money. Remember, not all attorneys are crooks, but there’s a reason they have that stereotype…one bad egg…
Definitely sounds fishy but if it could work, then it be a great tool to pick up preforeclosures at a great discount and plenty of time to find a new buyer. Easiest way to my knowledge to postpone a foreclosure if to fill Bankruptcy the day before the sale takes place.
I’m not sure I understand. The corporation with the homeowner as trustee in essence puts a lien on himself using the corporation as a ruse to shield an asset and avoid debt obligation-is this analysis correct?
Unless the Corp with the UCC1 files bankruptcy. Since the property is an asset of the corp in BK I bet it would stop the action… Heck I have all kinds of scams…
he’s not saying he can stop it, rather he said, “it can stall the foreclosure of the house for up to 36 months” But I still don’t think it will even do that. Its not the property they are foreclosing on, it’s the lien. So ownership of the property shouldn’t slow the foreclosure of the lien. Unless you can get the lien put in the company, which no lender in their right mind will do, the foreclosure against the lien will still happen regardless of property ownership.