listed on mortgage, coborrower filing bankruptcy

[vchaz]

What is the name of your state? Indiana

A few months before my wife and I got engaged and she moved out, she had signed on as a co-borrower for a mortgage on a mobile home. The other co-borrowers are her Grandmother, and her grandmother's husband of 5 years. She has not lived there since we became engaged. Her grandmother since passed away, leaving four people (including us and the husband) a small amount of life insurance, and leaving the husband with a huge sum of medical bills he cannot afford... He's declaring bankruptcy, I realize that barring a bankruptcy of our own, it falls to us to pay the mortgage. My wife is interested in taking over the mobile home. There is no equity in the home, there is about 3 years remaining on the original 5 year mortgage, by which time the mortgage must be refinanced. Which shouldn't be too much of a hassle as the owner of the mobile home park also owns the mortgage company.

My questions are: What do we need to do to take over the house? If we simply continue to make the mortgage payments, will the house be fully titled in my wife's name, or would there be 3 people on the title regardless of who is liable to pay the mortgage? Our credit is not very good, so I'm afraid trying to refinance in both of our names would result in a much higher interest rate..

Do we have to get the husband's signature on anything, and if so, before or after his bankruptcy? In case it matters, my wife contributed little to the mortgage payments, and the husband's made all the payments for 2 years, but the amount owed on the home ($35k) is more than the home's recently appraised value ($34.5k). (only about $100 comes off the principal each month)

Any other issues that I'm not seeing? I have no experience with mortgages or real estate, as I've only rented... Thanks for any advice.

-Ryan (Vchaz)

[FlyingRon]

Who pays the mortgage has no bearing on the title. If people want to voluntarily give up ownership, it's fairly easy to get them off the title. It would be near impossible to get them off the note, unless your friendly trailer park guy will allow that modification (unlikely).

Without all the parties consent, it would be unlikely to get anything to happen (it would take a partition lawsuit to sell the property).

Bankruptcy doesn't really do anything to secured loans other than perhaps a temporary stay on foreclosure/repo.

[vchaz]

If I understand, the title to the home will have a lien from the mortgage company? so wouldn't trying to change who is on the title not be possible without the lien-holder's consent? My wife's plan was to just pay on the mortgage without doing paperwork (An attorney told her he assumed "as long as they're getting their money" they would not try to force a refinancing....). I don't like that idea, I watch judge judy often enough to want to be protected by paperwork with signatures! Paying the mortgage as it stands might be good for now, I'm just under the assumption that it won't be good enough when the husband's bankruptcy goes through.

So, assuming we decide to keep the trailer, what do we need to do to protect ourselves? I don't want the husband of the deceased to legally have ownership if we pay off the mortgage. Is it correct to say that in order to protect ourselves we need to remove anyone besides my wife or myself off the title AND mortgage note?

Would a quit claim deed help? If so, would the husband need to sign one on behalf of his deceased wife?

As far as the "friendly trailer park guy" is concerned, I do have the leverage of offering 35% down, so I think we may be able to obtain a new mortgage... I didn't know it was even possible to get the mortgage company to remove names off the current note; if they agreed to such a thing, would they be able to add my name to the note as well?

I'm trying to get all the information I can before I approach the trailer park/mortgage company .. the husband is living there and paying the mortgage & lot rent until he finds a place he can afford. I don't want to put him in a bad spot by doing or saying something to the mortgage co. that gets the "ball rolling" on an eviction or foreclosure

Also, if we decide against trying to keep the mobile home, is it correct we will ultimately be solely responsible for the remaining balance on the mortgage minus whatever the company is able to sell it for?

[seniorjudge]

Q: If I understand, the title to the home will have a lien from the mortgage company?

A: It depends on what property (real, personal, or mixed) that is listed as collateral on the mortgage.


Q: so wouldn't trying to change who is on the title not be possible without the lien-holder's consent?

A: Generally, that is true.


Q: My wife's plan was to just pay on the mortgage without doing paperwork

A: An extremely bad idea.


Q: So, assuming we decide to keep the trailer, what do we need to do to protect ourselves?

A: All the lienholders and all the title holders and the bankruptcy court must all agree in writing.


Q: Is it correct to say that in order to protect ourselves we need to remove anyone besides my wife or myself off the title AND mortgage note?

A: Yes; you want to wind up with a clear title and no liens.


Q: Would a quit claim deed help? If so, would the husband need to sign one on behalf of his deceased wife?

A: You can't sign for a dead person; there must be some kind of probate.

[seniorjudge]

vchaz, you have a real mess.

You need to hire a lawyer.