The Washington times., 1929-02-16
FEDERAL lie Ms
BILL STUDIED
!, IN SENATE

A bill providing for the devesti-
ture OF Federal liens has passed the
House of Representatives by unani-
nous consent. and is now in the
hands of the Senate Committee on
the Judiciary
The bill is of Importance to all
owners of real estate in that its
enactment would be definite step
toward the removal of unnecessary
restrictions against the sale of real
property, according to the National
Association of Real Estate Boards,
The enactment of this legislation
would permit the United States to
be made a defendant in cases in
which a mortgage seeks to fore
close Under his prior lien where
there has been filed against the
real estate junior lien by the Fed
eral Government for some debt due
the United States by the owner OF
the equity in the property. and for
which the mortgage owes no obli.
cation.
Effect Of Bill
The effect of the bill on real
estate liens as stated by the House
Committee on the Judiciary in re-
porting on the bill and recommend.
ing its passage is as follows:
This legislation has been recon-
mended in order to relieve
against the injustice with which
nnortga gees are confronted under the
present state of the law who find,
when it is necessary to foreclose
their mortgages, that there has been
filed against the property a junior
hen by the Federal Government for
some debt due the United States by
the owner of the property. and for
which the mortgage owes no obi
cation either legal or moral. In such
circumstances it is impos-
sible for him to bring about judicial
sale of the property owing to the
cloud upon the title created by the
Governments lien. He can not re-
move the lien, and there is no way
b. which he may bring the United
States in as one of the parties to the
foreclosure procedure. He is
defeated in his own right to fore
closure unless he Is willing to pay
off the Government lien, debt for
which he is no way RESPONSE.
The purpose of this bill is to pro-
vide simple and jc-t method of
proceeding in such cases, one which
Is fair to the holder of the prior lien
on the real estate and which amply
and fully protects the rights of the
Federal Government. !"
Essence OF Bin
The essence of the bill as outlined
In the report Of the House Commit.
tee on the Judiciary is as follows:
'The bill simply provided that
whenever a priar lien or encum
brance bill shall have been pro-
ceeded upon, in a State court, and
1t shall appear that there is filed OF
record a lien in favor of the United
States, the plaintiff or plaintiffs
may have the proceedings removed
to; the United States district court
in the district where the property
subject to the lien is situated and
authorizes the district court to enter
an order expressly authorizing the
addition of the United States as a
party defendant and to proceed to a
hearing upon the question of the
priority of the lien of the plaintiff
or plaintiffs over the lien held by
the United States. After determine.
tion Of the status of the Federal
Governments lien, the case shall be
remanded to the State court. so that
It may proceed to execution and to
sale, subject, however. to such order
as may be entered by the United
States district court. limiting the
judgment in the suit as against the
rights. If any, of the United States.
"The bill further provides that
the lien of the United States upon
the property in question shall be
subject to discharge from said prop.
erty by the judicial sale ordered by
the State court in the same manner
as may he provided by the State law
as to other liens and that the United |
States shall be relegated to the fund
produced by such sale. The pro-
cednre provided allows the State |
court to retain its Jurisdiction over
the real estate. saving only to the |
Federal Government the right to
determine the status off it's lien in
Its own court.
is hoped that Congress will
speedily enact this legislation"
The bill was originally drafted bv
the American Bar Association. Tn
the. form in which it passed the
House 1t was redrafted in the House
Judiciary Committee.
i