Loan Workout Advisor Vol. 2– “Understanding the Mechanics of Mechanics Liens”, By Thomas M. Lombardo
Mechanics liens may be one of the toughest issues for a loan workout specialist to tackle. Not only has your borrower missed a few principal and interest payments, he has also failed to pay his taxes and they are about to be sold to the vultures. And now, to make matters worse, you start getting something called a “Section 24 Notice” from numerous contractors that you have never heard of, all claiming that they “improved” your real estate collateral but didn’t get paid. Then, after you order a title report and start gearing up for a foreclosure, deed-in-lieu or note sale, you learn that there are a dozen or more mechanics liens on the property, which add up to a startling amount, all claiming to be ahead of your mortgage.