Weird situation mortgage question

[heartsy77]

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]

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]

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.

 

[bdcp]

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.

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]

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.

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. I knew this was a complex issue, I think she may to consult a lawyer.

 

[theguda]

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]

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]

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]

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]

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.

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]

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]

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]

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]

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]

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.

, I agree!

 

[Mama Who]

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]

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]

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

 

[Tink888]

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]

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!