Land Trust & Informal Assumption in Texas

[Lee Kuhlman]

What is the name of your state (only U.S. law)? Texas

Hi All,

A couple years ago we found ourselves in a situation where we needed to sell our rental property in Texas. After a year of no legitimate offers, we were contacted by one of those We Buy Ugly Houses companies. They said that thier company helped people with good income and bad credit to clean up their credit. They told us that we could sell our house to a land trust in my name and that they would assume the mortgage, taxes, insurance, and HOA dues. They would rent the house to a prospective buyer until their credit was sufficient for them to refinance thereby getting me out of my obligation to the mortgage company. This was filed in the county records and seemed legitimate to me considering that I still technically owned the house. Where I screwed up is signing the power of attorney allowing up for sale. The POA was ostensibly to allow them to talk to the mortgage company, HOA, etc. However, they sold the house! I actually didn't know until nearly two years later. Now, we are in a bad situation. First, I am in a quandry as to tell the mortgage companies (1st and 2nd) because I now know that we (via the POA) have violated the Deed of Trust. When I confronted these guys about it, they told me that, yes, they were aware that they were in violation but that as long as they kept making the payments, no one would care. Which I guess was somewhat sound logic until I find out that they are 3 months behind on the 2nd mortgage. I'm getting the threatening letters from the lender. The agreement that we signed with these guys states that they will make all of the payments.

I could use some advice as to the next steps I need to take...

Help!

Lee