Leins on Property

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Ditto. Only thing I can add is that in some states (like IL for example), a judgment acts as an automatic lien against any real estate you own. Which would still require them to file and win a lawsuit, but then they just have to take that judgment downstairs to the county recorder, and it gets recorded as a judgment lien until released.

If you still have 28 months of payments remaining on your property and little equity what does a property lein do? I know you cant sell until you take care of the lein, but what happens if you stay in your home and continue making mortage payments?

Basically that's it... the lien just lays dormant until you ever go to sell or refinance your house. Figure 10 years from now if you decide to move, then you'll have to pay off that lien in order to sell it, and then there'll be 10 years worth of interest due.

However, another lien can actually affect your mortgage. Most mortgages have a due on demand clause, which states that if you allow another lien or encumbrance to be placed on the property, then they can consider it a default and declare the entire unpaid balance immediately due and payable. I'm not sure that mortgage companies gerenally enforce those clauses, but technically you could find yourself in hot water if the mortgage co finds out another person put a lien on the property.

Does a lien show up on your credit report? Say you apply for a loan can the lien effect it.

The judgement will definitely show up, and depending on your state, can stay on your credit report 20 years (or even effectively permanently) with up to 20% interest applied. See:
"http://www.cardreport.com/laws/judgement-sol.html"

And yes, with an active judgement, you will likely get *no* new credit at all.