Legal Question in Real Estate Law in New Jersey

Re: title agency responsibility

Your facts are incomplete, so I am presuming the judgment was against your husband only (not you) and that the house is owned by both of you, not your husband alone. If I am correct, you should know the following. A judgment, once recorded, is a lien against the property, just like a mortgage. However, it is only a lien against the interest of the creditor (your husband) in the house, not all interests if you are also on the title. If the mortgage company did a title search before granting the mortgage, they should have been aware of the judgment and they made the mortgage knowing of it. That makes their lien a second lien, subordinate to the judgment lien. If the mortgage stays current, under my facts, they can do nothing unless the judgment holder brings a foreclosure action to collect on its judgment. If this were to happen, they could only go against the interest of your husband in the house. If you were married and the house was titled in both names (registered as H and W, with no limitation of the ownership such as describing you as tenants in common) their right to collect is subject to your interest and is limited. Ownership of a house between husband and wife, unless limited by the language "tenants in common" makes it very difficult for the judgment creditor to do anything now, but sit on its lien. If your husband were to pass away before you, their lien would be valueless and could never be enforced. However, if you were to predecease your husband, their lien would have full value. You have no recourse against anyone since the mortgage was disclosed by the title search and the mortgage was granted anyway. At worst, the judgment creditor could attempt to foreclose, which should be resisted by you, and if there were a possible sale, you could not be removed from the house. This is a complicated real estate and title issue, and you should consult an attorney as to your rights and exposures. This answer does not create an attorney-client relationship and is merely given in response to an Internet question.

Re: title agency responsibility

There is something here, but I am not sure that you have given sufficient facts to assess the situation. For example, I don't understand that, if the mortgage was negotiated years ago, why the matter should be an issue today. What has happened?

That said, it is the mortgage holder that should be concerned. Your title insurance only insures the title to the property. If the insurance company has to pay because of a judgment lien against you they will acquire the rights of the judgment holder and can possibly recover against you. The only benefit to you in the current situation is that a third party could conceivably convey title with that judgment paid (by your title company). If you are a party to the transaction, the new title company will still require that the judgment (which is now of record) be paid.

It usually goes without saying, but there are so many variations on these facts that could be significant, I feel obligated to emphasize that this is not specific legal advice for you. If you want an assessment of your particular situation, you should consult your lawyer. If I can be of further help to you, please feel free to call.