Signing off a loan or Foreclose?

[Jen88]

What is the name of your state?What is the name of your state? PA

My parents sold their home about 10years ago to a gentleman and his family. He was not approved for the total mortgage amount so he asked to do a personal loan with my parents to cover the remainder of the costs. They agreed to the loan and everything was set to go. After 6 months of payments from the gentleman, he passed away and left his family in complete debt. His wife had asked us to sign off on the loan but my parents did not agree to it and the matter was dropped after awhile.

Fast forward 10years later, we were contacted by a real estate company and the title company telling us that the wife is now selling the home but she cannot sell it because she still has the personal loan with us that has not been paid off.

At this time the Real Estate Agent is asking us to sign off on the loan or the house will be foreclosed by the bank because she is in complete debt. What do you recommend we do? Should I sign off or let the house get foreclosed? Can I place a lien on the house so that if the bank does forecloses, we can recoup some of the money?

[Ciarraine]

Originally Posted by Jen88

What is the name of your state?What is the name of your state? PA

My parents sold their home about 10years ago to a gentleman and his family. He was not approved for the total mortgage amount so he asked to do a personal loan with my parents to cover the remainder of the costs. They agreed to the loan and everything was set to go. After 6 months of payments from the gentleman, he passed away and left his family in complete debt. His wife had asked us to sign off on the loan but my parents did not agree to it and the matter was dropped after awhile.

Fast forward 10years later, we were contacted by a real estate company and the title company telling us that the wife is now selling the home but she cannot sell it because she still has the personal loan with us that has not been paid off.

At this time the Real Estate Agent is asking us to sign off on the loan or the house will be foreclosed by the bank because she is in complete debt. What do you recommend we do? Should I sign off or let the house get foreclosed? Can I place a lien on the house so that if the bank does forecloses, we can recoup some of the money?

Was the owner financing loan from your parents a mortgage? If so, you already have that lien.

You need some help protecting your interest. Get an attorney to represent you.

[seniorjudge]

Q: What do you recommend we do?

A: If you want the money, tell them to fork over the dough before you sign the release. Otherwise, sign the release for free.


Q: Should I sign off or let the house get foreclosed?

A: See first answer.


Q: Can I place a lien on the house so that if the bank does forecloses, we can recoup some of the money?

A: You already have a lien or the title company would not have contacted you.

[nextwife]

If the loan was secured by the real estate, then the balance is owed at sale, whether the ORIGINAL borrower died or not. The heirs are selling the property, whatever was still owed SHOULD be paid off and released.

If a balance is still owed, send a payoff letter, along with an accounting of how the figures were calculated, to the Real Estate agent to forward to their closing agent.

[HomeGuru]

Get a fast appraisal done of the property to see if there is enough equity to even pay the loan off.