Thread: Help!!!

Hello to all! This board is such a wonderful resource, I'm hoping that one of you can assist me with a problem. A relative of my wife's has moved from her home into an assisted living complex, leaving her home and 60-day past due mortgage. She asked if we would be willing to take the property, and after a careful assessment of the profit potential, we said yes. Here is our dilemma: I can write a check for the past-due mortgage payments today, but I'm concerned about my exposure. Is there a promissory document I can have her sign to ensure that if I cover the back payment, she will still be bound to sell me the property? Is there a document that she can sign to deed the property to me? In addition, I have recently found out that the property is still in her deceased parent's name. If there is no will, what probate problems can ensue? Is there a way to circumvent these issues in the absence os a will? Thanks for your help!

Sounds sticky.

The fact she doesn't actually own it right now could cause you big problems - sounds like you are going to need a probate attorney - and it is not often the fastest system.

Unless you are 110% sure she will get the property and there aren't other liens on it you are pretty much gambling you money in my opinion.

That said she can do a 'quit claim deed' to deed the property to you once you write the check. (you do want to avoid the ridiculous late fees that get charged, etc).

However this will likely make you liable for tax on the transfer depending on your state.
And if the mortgage has a 'due on sale clause' (99.99% of them do) then when the bank finds out they can accelerate the mortgage and call the whole balance immediately due!

Depending on the condition of the property, your local market and the bank you may be able to negotiate a 'short sale' - in other words get them to accept a lesser amount than is due in order for them to avoid the cost of foreclosure - but this can be a complicated and tedious process and you have to do it exactly the way they want...

My first question is this person legally compentent to sign legal contracts and other agreements and documents?

Usually, when there is a mortgage, the mortgage company will require a title report be prepared to ensure they are lending to the rightful owner of the property.

I would check the deed and title report to the property and review how the property is currently being held. Does the rightful and legal owner hold a "life estate", tenant by the entirety, tenant in common, or the like? In other words, "who holds title to the property? Who holds the rights to sell, lease, rent, or otherwise encumber or alienate the property.

Once I had performed my initial due diligence, my suggestion to you: immediately go to a real estate attorney in the state where the property is located. Take with you each and every piece of paper you have on the property, including any mortgage papers, title reports, past building permits, anything that pertains to the property.

By performing an initial due diligence on the property ownership, and the legal soundness of mind of the party holding title (assuming it is the stated relative), you will be better prepared to ask informed questions of the attorney.

Good luck!

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sit down with a lawyer and get the paperwork worked out..There are agreements you can sign that if she gets the house it will go to you..But you need a good real estate lawyer

Update!!! Thank you all for your replies, they are most helpful. Since my last post, I have procured all documentation that verifies her full ownership of the property, and will proceed as suggested. If there are any more ideas floating out there, please let me have 'em... thanks again!