PDA

View Full Version : Weird situation mortgage question


heartsy77
03-09-2011, 07:52 PM
My sister called tonight and asked me an odd question: she and her dh have been living in a mobile home for 7 years that his father, soley holds the mortgage. Anyways my BIL father died 8 or so years ago and the continued to make the payments to the bank while living in it. She is now wondering if they are legally liable for that mortgage Neither of them is on the loan in any way. They want to walk away from this mobile home and buy a new house. I told her I didn't think so but could I be wrong?

58cognac
03-09-2011, 08:10 PM
I guess I would wonder how they would explain their "rental/residence" history since I think when we bought our home 10 years ago they wanted to know ours for the previous 10 years. Does the bank have their info as "renters", can they be linked to the home? I dunno, just wondering.

heartsy77
03-09-2011, 08:34 PM
I guess I would wonder how they would explain their "rental/residence" history since I think when we bought our home 10 years ago they wanted to know ours for the previous 10 years. Does the bank have their info as "renters", can they be linked to the home? I dunno, just wondering.


I'm not sure. I believe she told them they were renters as the FIL put the house in his name for them. She says that even after he died they still didn't have their name listed on deed, loan, or account. They just kept paying the payments and supposedly the bank is aware the FIL is deceased. :confused3

bdcp
03-09-2011, 08:42 PM
I'm confused. BIL's father died 8 years ago but they've been paying him the mortgage for 7? I reread it 5 times and still read it the same way.:confused3

Okay, think I got it, they moved in and made the payments after he died. Who were his heirs? If they are, then they could be liable. Debt doesn't go away with death. They may not be on the loan but who inherited everything? Besides the fact you're supposed to report the death to all creditors. I think they have a can of worms here. I really doubt the bank is aware the FIL is dead.

heartsy77
03-09-2011, 08:55 PM
I'm confused. BIL's father died 8 years ago but they've been paying him the mortgage for 7? I reread it 5 times and still read it the same way.:confused3

Okay, think I got it, they moved in and made the payments after he died. Who were his heirs? If they are, then they could be liable. Debt doesn't go away with death. They may not be on the loan but who inherited everything? Besides the fact you're supposed to report the death to all creditors. I think they have a can of worms here. I really doubt the bank is aware the FIL is dead.

Sorry I meant 8 years.
She says the bank knows; i have no way of knowing if this true or not. I really don't think she would lie to me.
I do know he had other children (all adults and a wife) and if I remember correctly his wife was in prison when he signed the mortgage; and he pretty much died penniless. :scared1: I knew this was a complex issue, I think she may to consult a lawyer.

theguda
03-09-2011, 09:12 PM
I've been a mortgage loan officer for 10 years. The only way you are financially responsible to the bank is if your name is listed on the mortgage note and/or deed. Since you're saying your name is not on either...you have no responsibility to the bank.

theguda
03-09-2011, 09:15 PM
Also, most lenders will only go back 2 years on residence history. It should suffice for your sister to say she lived in a home owned by her father-in-law and paid no rent....which is 100% accurate.

JoiseyMom
03-09-2011, 09:17 PM
Well if he died then his heirs own it. I can't believe someone died and the deed and all that wasn't changed over. It doesn't make sense to me in anyway.

PrincessDadx2
03-09-2011, 10:25 PM
Well if he died then his heirs own it. I can't believe someone died and the deed and all that wasn't changed over. It doesn't make sense to me in anyway.

Mobile homes typically make lousy security, so it is really an unsecured loan. If the estate was truly negative/zero then the bank might have been perfectly happy to receive another 8 years of payments on a loan that otherwise might have been worthless. If there was value in the estate then someone owes the bank the balance. Either way, whoever was the executor of the estate dropped the ball from a legal perspective. Don't know how you go back and fix everything, but it would have to be resolved before just walking away.

allison443
03-10-2011, 12:03 AM
I'm not sure. I believe she told them they were renters as the FIL put the house in his name for them. She says that even after he died they still didn't have their name listed on deed, loan, or account. They just kept paying the payments and supposedly the bank is aware the FIL is deceased. :confused3

This sounds like the father-in-law took out the mortgage in his name, but you sister and her husband made the payments all along (even when he was alive)? Were they unable to get the mortgage themselves or for some other reason it was in his name rather than theirs?

I agree with the other posters, the property/mortgage should have all been handled when the father in law passed away.

heartsy77
03-10-2011, 09:17 AM
I've been a mortgage loan officer for 10 years. The only way you are financially responsible to the bank is if your name is listed on the mortgage note and/or deed. Since you're saying your name is not on either...you have no responsibility to the bank.


This what I thought as well. Yes her FIL put the loan in his name as they didn't have the credit and they have lived in it even when he was alive.

I don't know why it wasn't handled when he died. I don't know much of his family but they seem like people who don't tie up loose ends.

I also figured the mortgage company was happy someone was paying the payments and as long as they were getting there money they looked the other way. I am sure the mortgage holder will repo the trailer and try to resell it. It's in pretty good shape, last time I was there 3 months ago, I am sure they could find a new purchaser.

cheshireqt
03-12-2011, 08:17 AM
That is an odd situation. Just a couple of observations. It sounds like your sis and BIL paid the bank directly and lived in the home for 8 years. Yet someone was the heir to the place, who? The wife, or the kids? In some states "squatters rights" kick in after 7 years. In other words they would be able to claim it if they wanted, they would have to file for it and show they paid taxes and mortgage, which sounds easy enough. Although if they just want to walk away? It sounds like in theory they could and let the bank figure it out?

tnmt
03-12-2011, 08:51 AM
I am sorry but I think this is just WRONG! Your sis and BIl wanted the trailer and didn't have credit to purchase it and so FIL did in his name and credit and now your sis wants to walk away from it and let it go. It is their responsibility to pay for it no matter whose name it is in. That is so wrong. They need to get it put in their name and then try to sell it then buy a house. This is what is wrong with the housing market now, people are just walking away from mortgages and such.

dakcp2001
03-12-2011, 09:39 AM
I am sorry but I think this is just WRONG! Your sis and BIl wanted the trailer and didn't have credit to purchase it and so FIL did in his name and credit and now your sis wants to walk away from it and let it go. It is their responsibility to pay for it no matter whose name it is in. That is so wrong. They need to get it put in their name and then try to sell it then buy a house. This is what is wrong with the housing market now, people are just walking away from mortgages and such.

I agree. They used FIL when they needed him, now they are just going to say whatevs to the bank. So wrong on so many levels. Walking away seems like stealing to me. I know banks are evil, but that does not make it ok.

I cannot help but think they bank will come after someone. It might be someone else in the family or whoever handled the estate. Probably the one responsible sibling. Bad juju.

cm8
03-12-2011, 12:24 PM
I agree. They used FIL when they needed him, now they are just going to say whatevs to the bank. So wrong on so many levels. Walking away seems like stealing to me. I know banks are evil, but that does not make it ok.

I cannot help but think they bank will come after someone. It might be someone else in the family or whoever handled the estate. Probably the one responsible sibling. Bad juju.

:thumbsup2, I agree!

Mama Who
03-12-2011, 01:35 PM
My sister called tonight and asked me an odd question: she and her dh have been living in a mobile home for 7 years that his father, soley holds the mortgage. Anyways my BIL father died 8 or so years ago and the continued to make the payments to the bank while living in it. She is now wondering if they are legally liable for that mortgage Neither of them is on the loan in any way. They want to walk away from this mobile home and buy a new house. I told her I didn't think so but could I be wrong?


Here's the problem with their plan...

Either they are the legal owners (as FIL's heirs) of the trailer and therefore responsible for it OR they are NOT the legal owners had have likely been committing a form of fraud by continuing to live in a house that they have no right to. If the property is mortgaged, FIL was not the sole owner- the bank carrying the mortgage was also an owner and the heirs/estate of the deceased needed to establish a new legal contract with the bank. You don't get to just keep paying on the mortgage. The mortgage is not transferable like that. It's based on the FIL's credit rating, etc. and once he was no longer around to be a party to the agreement, the agreement was invalid and it was deceitful for them to just keep making payments without notifying the bank.

Walking away could lead to questions about their potential misconduct and they should be careful.

Colleen27
03-12-2011, 02:38 PM
From a purely practical standpoint, yes, they can probably walk away without repercussions. Unless they're on the loan or the deed, the bank's only recourse in the case of default would be to repossess the home and perhapns go after the FIL's estate. Since it sounds like there is no estate to speak of, that's likely an uncollectable debt.

The morality of that course of action is an entirely different can of worms, and on that count all I'm going to say is that banks and other corporations aren't letting morality/ethics get in the way of the decisions that make the most sense for their bottom lines...

canopynut66
03-12-2011, 02:49 PM
My sister called tonight and asked me an odd question: she and her dh have been living in a mobile home for 7 years that his father, soley holds the mortgage. Anyways my BIL father died 8 or so years ago and the continued to make the payments to the bank while living in it. She is now wondering if they are legally liable for that mortgage Neither of them is on the loan in any way. They want to walk away from this mobile home and buy a new house. I told her I didn't think so but could I be wrong?


Not sure how he did this as when a person dies it is almost immediate that the banks and mortgage companies are notified. As well as the credit bureaus. We just had that with our Mother and the bank knew when we walked in the next morning after her death to take care of some things. He needs a good attorney I would say IMO:surfweb:

Tink888
03-12-2011, 03:04 PM
If the FIL was the only name on the deed and mortgage then your sister and BIL can walk away and are not responsible for continuing payments.

The property and debt are part of the FIL's estate. Someone in the family should contact an attorney about probating the estate and selling the trailer to pay off the debt. Proceeds from the estate (if any) would then be split among the heirs of the father.

If nothing is done, the bank will just foreclose on the property.

I'm not sure if the bank would pursue anything along the lines of fraud since they made payments on the mortgage after the father died. Even if your sister and BIL had continued to make payments until the mortgage was paid in full, they still would have no rights or ownership in the property since they were not on the deed. And at that time, they would still need to go through probate and possibly pay inheritance taxes.

rockydek
03-12-2011, 03:12 PM
I think the bank may have questions...Like...
Who has been paying the mortgage?
Who has been maintaining the mortgaged property?
Who has been living in the property?

Its been 8 years. Also..Does the property have any value?
Did the FIL do this for them as a favor... Are other siblings going to be held liable for the unpaid balance.
It seems that walking away is not going to be as easy as they might think. Are they now credit worthy because of the FIL?
Very Odd! :confused3

seashoreCM
03-12-2011, 03:17 PM
It is not fraudulent to keep living in the house. It is up to the owner to evict. It is up to a bank or other mortgage holder to acquire ownership by foreclosing. It is not a crime until eviction proceedings have been concluded normally and the property posted with appropriate no trespassing signs.

I am not certain whether making the payments establishes an obligation to make them all but I do not think so. In that case the bank can foreclose (only after some condition of the mortgage note has been violated such as nonpayment) but would have to go after the borrower (or nobody) in case the proceeds of the foreclosure do not satisfy the loan.

A not so common but perfectly legal form of buying property is "subject to the mortgage". This is not an assumption. This is not unlawful or immoral. Because the seller remains responsible for the mortgage loan, he may reject the buyer's offer to do it that way. The buyer has not accepted responsibility. The lender can foreclose according to the terms of the mortgage loan which may include upon transfer of the property.

The heirs would not be liable for the consequences of the loan or a foreclosure other than loss of the subject property.

A person named as executor in a will may decline the appointment including if he feels that there would be not enough in the estate to compensate him. If there is no executor, the state will furnish one.

Assuming a mortgage: http://www.cockam.com/assume.htm

"It was good while it lasted."
Many upside down homeowners could have lived free although insecurely for long periods of time while awaiting foreclosure, as opposed to disgustedly moving out quickly.

dcfromva
03-12-2011, 04:27 PM
My sister called tonight and asked me an odd question: she and her dh have been living in a mobile home for 7 years that his father, soley holds the mortgage. Anyways my BIL father died 8 or so years ago and the continued to make the payments to the bank while living in it. She is now wondering if they are legally liable for that mortgage Neither of them is on the loan in any way. They want to walk away from this mobile home and buy a new house. I told her I didn't think so but could I be wrong?

They should check with the bank to see how the paperwork was filed. Was FIL the only name on it --or might he have co-signed the loan?

If the FIL held the mortgage and they were not listed on it, then they have no financial liability. In fact, it sounds like their situation was the one that was the most precarious because they have been paying money for property in which they don't hold a clear title. Not even mentioning the bank taking action-- It would be a worry that they could be booted off at any time by heirs who could force a sale of the property depending on the conditions of the will. While the DH may be an heir to the FILs estate, he wouldn't be the only heir if fil was married. (Of course, probably not as much worry if the mortgage is more than the value of the property).

And, just because you inherit something does not mean you have to take it--you can disclaim the inheritance and it passes to the next person in line.

There are a lot of what have yous and what nots. All good reason to seek the advice of an attorney about what to do about settling the estate.

mrsklamc
03-12-2011, 04:50 PM
I think there's too much going on here for anyone to be able to say with certainty. Something should have happened when FIL died that didn't. Since that didn't happen the way it should have, I think all bets are off as to what might happen.

deedeetoo
03-12-2011, 05:26 PM
I'm guessing this estate was never probated and the bank never forced the issue because it was getting its money.

When the FIL died, the property should have gone into his estate and the mortgage should have been paid off from cash in the estate. If there wasn't enough cash in the estate to pay off the mortgage, then the house should have been sold to pay it off. If there wasn't enough from the sale to pay off the mortgage, the bank cannot go after the heirs for it. You don't inherit someone else's debt when they die. You also do not become responsible for someone's debt just because you have been paying it for awhile. I think they can just walk away from it with no repercussions.

Whether this is morally right or not is an entirely different discussion.

mrsklamc
03-12-2011, 05:34 PM
the sale to pay off the mortgage, the bank cannot go after the heirs for it. You don't inherit someone else's debt when they die.

But if they inherited any money when he died, and any money is owed after the sale of the trailer, then couldn't they be liable to repay that money since it wasn't actually theirs to begin with?

deedeetoo
03-12-2011, 06:00 PM
But if they inherited any money when he died, and any money is owed after the sale of the trailer, then couldn't they be liable to repay that money since it wasn't actually theirs to begin with?

But the bank would have to prove they inherited money. And if the estate was never probated then they officially didn't "inherit" anything.

heartsy77
03-12-2011, 06:46 PM
Ok I called my sister and got some clarification:

LOAN IS ONLY IN FIL NAME, there names are not on loan papers, title and etc. The mobile home is on private property owned my sisters mom ( same dad as mine different mom). According to my sister will wasn't probated as there was nothing to probate, he had no inheritance to leave anyone. My sister maintains banks has known her FIL was dead since the month after he died and taken their payments since then with no problem. She also told me she called a lawyer, after my prompting, and he said she has no liability to the loan or the mobile home. Since her mother owns the property they will call the bank and tell them to come get it as they are building a new house on the property and her mom is cosigning loan.

As far as judging my sister it's not place to say whether she's right or not. She is my sister after all! Personally I think her mom is nuts for cosigning a loan for them but again not my place. Thanks for all your input.

seashoreCM
03-12-2011, 10:03 PM
She is my sister after all! .
Then you would be doing her a good turn by voicing to her your opinion when you think she may be getting herself into trouble.
In fact, it sounds like their situation was the one that was the most precarious because they have been paying money for property in which they don't hold a clear title. .
Making the payments decreased the chance that the bank would foreclose while they still needed to live there. And not checking with the bank would also decrease the chance that the bank would exercise its right to demand a full payoff or foreclose. In other words they let sleeping dogs lie.

jgates
03-13-2011, 01:03 AM
With a poorer resale value of mobile homes I would bet the bank was ecstatic that the payments have just continued. Most times a mobile home is not allowed to amortize over a severely long period of time - it could very easily be nearly paid off if it had a 10 year amortization.

Someone in the family would be the beneficiary of this mobile home & it would probably be smarter to determine the ownership, current balance & resale value. It might be smarter to resell the home (to be moved of course) & split the profits. There may be virtually no balance left at all on the loan. However, they may want to verify from the original docs that there is no lien on the land in any manner. As I mentioned, 10 years is a long time on a mobile home if there is no actual real estate involved.

heartsy77
03-13-2011, 06:47 AM
With a poorer resale value of mobile homes I would bet the bank was ecstatic that the payments have just continued. Most times a mobile home is not allowed to amortize over a severely long period of time - it could very easily be nearly paid off if it had a 10 year amortization.

Someone in the family would be the beneficiary of this mobile home & it would probably be smarter to determine the ownership, current balance & resale value. It might be smarter to resell the home (to be moved of course) & split the profits. There may be virtually no balance left at all on the loan. However, they may want to verify from the original docs that there is no lien on the land in any manner. As I mentioned, 10 years is a long time on a mobile home if there is no actual real estate involved.

I forgot to post this with the update the loan on this mobile home was for 25 years! I had no idea that you could take out a loan for that long on a mobile home. I think she said the mortgage was through a company called Greentree.

deedeetoo
03-13-2011, 10:09 AM
They would not be able to sell this home without going to probate. The home is in the FIL's name. The only way to sell it is to get an executor named who has the right to dispose of the FIL's property. Any money received from the sale of the home would have to go to the bank first. If the value of the home is less than the mortgage then they gain nothing by going through all this except that whoever bought it would move it off the property.

As for asking the bank to come pick it up - don't bet on it. I am guessing that if the payments stop, the bank will begin foreclosure actions, but they don't want this home, have no place to put it, and are likely to leave it right where it is. Until foreclosure is complete (which can really take awhile especially since there is the issue of the borrower being deceased with an unprobated estate) the house still belongs to the FIL. The bank does not want it and you can't force them to take it.

cheshireqt
03-13-2011, 10:29 AM
Ok I called my sister and got some clarification:

LOAN IS ONLY IN FIL NAME, there names are not on loan papers, title and etc. The mobile home is on private property owned my sisters mom ( same dad as mine different mom). According to my sister will wasn't probated as there was nothing to probate, he had no inheritance to leave anyone. My sister maintains banks has known her FIL was dead since the month after he died and taken their payments since then with no problem. She also told me she called a lawyer, after my prompting, and he said she has no liability to the loan or the mobile home. Since her mother owns the property they will call the bank and tell them to come get it as they are building a new house on the property and her mom is cosigning loan.

As far as judging my sister it's not place to say whether she's right or not. She is my sister after all! Personally I think her mom is nuts for cosigning a loan for them but again not my place. Thanks for all your input.

Oh wow! Complicated. If I have it right now with the new info: Property belongs to your sister's Mom, trailer belongs to the Dad. The trailer is in the way of the house they want to build on her Mothers land. They want the trailer gone, with no expense or liability. Since they are talking to a lawyer they should do what the lawyer says.

Conkozan
03-13-2011, 10:47 AM
Were your sisters parents married at the time of his death?

heartsy77
03-13-2011, 04:44 PM
Were your sisters parents married at the time of his death?

My sister's mom owns the property. My BIL father owns the trailer but is deceased.

Octoberbabiesrus
03-13-2011, 09:39 PM
As for asking the bank to come pick it up - don't bet on it. I am guessing that if the payments stop, the bank will begin foreclosure actions, but they don't want this home, have no place to put it, and are likely to leave it right where it is. Until foreclosure is complete (which can really take awhile especially since there is the issue of the borrower being deceased with an unprobated estate) the house still belongs to the FIL. The bank does not want it and you can't force them to take it.

and it cost close to $6 grand to move a single wide mobile home, and 10k for a double. After we had to default on a mobile home loan cause of unemployment, its still sitting there. Been 6 years.

horseshowmom
03-13-2011, 09:54 PM
Yeah, I was positive they didn't have any legal liability (although I agree with others about the ethical responsibility), but I wouldn't count on the bank rushing out there to move the trailer.

As some point the owner of the land may be able to threaten the bank with rental charges. I do think it's kind of crooked though - get the trailer through dad until you're tired of it and then use mom to force the bank to move the trailer. I realize that legally they are probably in the clear, but it's still not a good situation.

phorsenuf
03-29-2011, 04:48 PM
and it cost close to $6 grand to move a single wide mobile home, and 10k for a double. After we had to default on a mobile home loan cause of unemployment, its still sitting there. Been 6 years.

:rolleyes1

scrapquitler
03-29-2011, 05:04 PM
:rolleyes1

popcorn::

I would think that the mobile home should have been part of the FILs estate when he died. The OP stated that 'there were no assets'. Wouldn't the mobile home have been an asset of his, just like a home or a car? I do know that the rules are different for mobile homes because they aren't quite a 'house' and they aren't quite a 'vehicle' so it's more complicated, but...

I think it's time for the couple living in the mobile home to spend a few hundred bucks to consult a lawyer. And whoever settled the FILS estate should be figuring out where they messed up.

horseshowmom
03-29-2011, 07:12 PM
popcorn::

I would think that the mobile home should have been part of the FILs estate when he died. The OP stated that 'there were no assets'. Wouldn't the mobile home have been an asset of his, just like a home or a car? I do know that the rules are different for mobile homes because they aren't quite a 'house' and they aren't quite a 'vehicle' so it's more complicated, but...

I think it's time for the couple living in the mobile home to spend a few hundred bucks to consult a lawyer. And whoever settled the FILS estate should be figuring out where they messed up.

It's only an asset if it's worth more than is owed on it.

sillylily
03-29-2011, 10:04 PM
They would not be able to sell this home without going to probate. The home is in the FIL's name. The only way to sell it is to get an executor named who has the right to dispose of the FIL's property. Any money received from the sale of the home would have to go to the bank first. If the value of the home is less than the mortgage then they gain nothing by going through all this except that whoever bought it would move it off the property.

As for asking the bank to come pick it up - don't bet on it. I am guessing that if the payments stop, the bank will begin foreclosure actions, but they don't want this home, have no place to put it, and are likely to leave it right where it is. Until foreclosure is complete (which can really take awhile especially since there is the issue of the borrower being deceased with an unprobated estate) the house still belongs to the FIL. The bank does not want it and you can't force them to take it.

Your reasoning is spot on the laws of most any state. I'm in SC, and the formal training I've had in the law here tells me that, all other factors aside, the bank probably has the full disclosure. Without a probated will and no one listed as a joint tenant with right of survivorship, there is no one they can hold liable. And no mortgage company wants to move a mobile home off of private property. Even a well-maintained one often costs more to transport than it will bring at auction. My guess (and it's an educated one, I promise!:lmao:) is that the home will wind up just standing in the same spot until someone claims possession, or the property owner finally decides it is enough of an eyesore to remove it.