When the escrow company discovers the support lien or abstract of judgment recorded by DCSS, whom do they contact and what information do they need to request a "demand"?
You may fax your demand request and a copy of the abstract or lien to 714.347.8175, ATTENTION: Demand Desk. Your request must be submitted in writing using your company letterhead with your telephone and fax numbers. You must include the following information:
Your client's full name
Social Security Number
Date of Birth
Driver's License Number
Attach a copy of the Abstract of Support Judgment
Attach a copy of the borrower's Authorization to Release Information form
You may also print out and complete the Escrow Company Inquiry Form. All of the information is required. It is important to obtain your client's information (Social Security Number, date of birth, CDL etc.) directly from your client. Do not use information taken from the copy of the Abstract of Support Judgment or lien, because DCSS wants to verify that the abstract is actually for your client and no mis-identification has occurred. Incomplete information may result in your request being delayed or not being processed.
Why is a copy of the abstract or lien necessary?
To prevent mis-identification, DCSS wants to make sure that your client is the obligor named on the abstract and that our department issued the abstract or lien. Every county in the State has a child support agency and each agency files its own abstracts or liens. Although we are in the business of collecting child support we want to make sure the money we collect is actually owed on one of our cases.
How can the Escrow or Title Companies avoid delay at the close of escrow, when they discover their client has a Judgment Lien filed by DCSS?
Typically the lien search is done by the title company on the property at the beginning of the escrow and one of the last things that is completed is a name search on the persons involved in the transaction. Because the abstracts and support liens do not attach to a particular piece of property, they are typically discovered at this later stage of the process and then the escrow is delayed because a "demand" is needed from DCSS. DCSS needs to determine how much support is owed by the obligor before it can issue the "demand".
One of the easiest ways to avoid last minute delay is to ask your client at the beginning of the escrow process whether he/she has a child support case open for enforcement with any county. By finding this out at the beginning of escrow your request for a demand can go out at the earliest stage of the process.
Another way to find out whether your client has a child support lien is to check your client's credit report. The credit report is typically included in the lender's information that comes over with the other escrow documents. DCSS is required to report obligors to the major credit reporting agencies. DCSS strives to act promptly on all requests, but it is imperative that complete information is received in a timely manner. Please double check the information and fax number you are using.
The fax number indicated above is a dedicated fax number for the Demand Desk. If the information gets sent to a different number or is mailed in, it may result in a delay in processing your request. If you have any other questions you may contact the Demand Desk directly at 866.901.3212
What happens when the escrow company or title company discovers a judgment lien or abstract recorded against an obligor who is buying, selling or refinancing a piece of real property?
The escrow or title company will request a "demand" from the creditor (the agency or person who has caused the lien to be recorded). A "demand" is a statement of how much is owed on the judgment. In the case of an on-going child support order, if the debtor is behind in his payments the demand will be for the amount of the support arrearage.
What happens after a demand for payment is received from DCSS by the Escrow Company?
If the obligor is selling or refinancing the property and there is sufficient money being realized in the sale or refinance to pay the full amount of the demand, DCSS will send a "matured installment" if future support is still owed, or a "release of lien" if the arrears have been paid and there is no future support owed. These documents will be recorded by the escrow company after payment on the demand is made.
If the obligor is buying a piece of property and owes past due support one of two things could happen:
If the obligor is currently on a wage assignment and his pay history is good even though he owes arrearages, DCSS will often subordinate its lien in favor of the first deed of trust on the new purchase;
If the obligor has a poor pay history and is not currently on a wage assignment, then DCSS will demand that the debt be paid in whole or in part before a subordination will be tendered.
What address should the payments be sent to?
Please make all checks payable to State Disbursement Unit. For proper identification, your client's full name and D.C.S.S. file number must be indicated on the face of the check. Payment Address: CA SDU, P.O. Box 989067 West Sacramento, CA 95798-9067
If the child support debtor is current on his child support obligation and owes only future support what process is followed?
If the obligor is current with his/her child support payments and owes nothing on the obligation except for future support, then a matured installment is sent to the escrow company in response to the demand request. This document indicates that all support obligations are paid up to date.
If a child support debtor is attempting to refinance his property to lower his interest rate and payment but isn't taking any money (equity) out of the property, will DCSS subordinate their lien in favor of the new Mortgage?
It depends. If the obligor is paying regularly by wage assignment or shows a good steady pay history and his/her arrearages are not excessive, then as long as he is not taking equity out of the property to pay off other bills or taking out cash for him or herself, DCSS will probably offer to subordinate its lien to the new first trust deed (mortgage).
If, however, the obligor is not paying his/her support obligation regularly or his arrearages are excessive or if he/she is taking money out of the transaction to pay off other creditors, then DCSS will demand payment of the arrearages before subordination or matured installment will be issued.
Occasionally if there are insufficient funds to pay the entire debt owed, a partial payment will be accepted and the remainder of the debt will be subordinated to the first trust deed (mortgage). The Assistant Department Counsel will make this decision after a thorough review of the obligor's payment record and consultation with the custodial parent.
Should the escrow company be concerned with prior quit claimed deeds issued on the property?
Yes! California law provides that when a grantor quitclaims his interest to another party, he transfers his entire interest including all the defects and equities, which could then have been asserted against him.
This means that when the debtor quitclaimed the property interest the person who took title obtained, took it subject to the recorded lien and DCSS can still assert a support lien on that property. This frequently happens in dissolution cases, where the support obligor quit claims the property in dissolution of marriage to the former spouse, who takes the property subject to the support liens.
If the escrow you are handling involves a property where quit claimed deeds have been filed, a name search will need to be performed for the grantor of the quitclaim to avoid problems and future litigation.
Why are judgment liens filed in support cases?
One of the enforcement tools that the DCSS is required by state regulation to use in enforcing its cases is the recording of a "judgment lien for installments under a support order". In every case with a support order that is open in our office, an abstract of the support order or judgment is filed with the county recorder's office in as many as three counties.
This recording will occur in the county or counties where the obligor resides, works, and where his / her parents reside. Because the abstracts do not reference a specific property, they do not appear on the initial title search of the property address. They will appear during the final title search of the obligor's name and / or social security number.
Does the lien or abstract ever expire?
No. As long as the support debt is owed the lien or abstract remains active. The California Civil Code exempts support judgments from renewal requirements and the support order or judgment is enforceable until paid in full. Some title and escrow companies have a practice of going back only 10 years on a name search because of renewal requirements. This practice should be avoided when there is a possibility that the client could have a child support obligation because it could result in a child support abstract or lien being overlooked since they are not subject to renewal requirements.
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