Weird situation mortgage question

[seashoreCM]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

Were your sisters parents married at the time of his death?

 

[heartsy77]

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]

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]

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]

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.

 

[scrapquitler]

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]

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]

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!) 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.