Unable to Refinance due to a life estate!

What is the name of your state? NY

My parents are currently trying to refinance their house, and everything was going just fine until the title was checked. The issue is that my grand mother has a life estate on the title.

Here is some background info:
My Mother, Father, and Grandmother bought the house in 1993. All 3 names were on the mortgage, HUD, and other docs.
In early 1996 my grandmother started acting strange (we found out later it was the beginning of Alzheimer's). So on April 3rd 1996 my mother had my grandmother sign documents making my mother power of attorney. Following that on April 26, 1996, my grandmother transferred her share of the house to my parents. But at that time her lawyer recommend she sign a life estate, which she did. My grandmother continued to live in our home until 1999 when she was placed into a nursing home due to her Alzheimer's. She is still living in the nursing home today.

My parents are currently trying to refinance our home but it seems that the life estate is causing a problem. The title company said my grandmother would have to sign some documents in order for my parents to refinance, however since she is in the advanced stage of Alzheimer's she is unable to sign anything nor can she understand anything that is going on. Her condition is so advanced that she doesn't know anyone and can no longer eat solid foods. Just to give you an idea of what I am talking about. I said well since my mother has power of attorney why can't she sign the documents. And the title companies answer was that the power of attorney was to old since it is from 1996 and there is no proof that my grandmother never revoked it.

At this point we are being told by the title company that the only thing to do is for my mother to get an attorney to get a court to appoint my mother the legal guardian of my grandmother.

I work for the mortgage broker that we are using so I know that they are doing everything in their power to get this taken care of, but I'm not sure if the title company is giving me the correct info.

Any advice would really be appreciated.

Thanks,
Brian

[HomeGuru]

duplicate post.