Mortgage Default

Harmony0800 · #1 10-11-2005, 07:58 PM

What is the name of your state? Michigan

My situation is a little different, so I will make it as short and simple as possible. I recently married my husband, who has been living in a home owned by his parents. He and I were both under the assumption that the home was paid for and the home was his parents gift to him. Very recently we found out that it was not paid for, and his parents were behind on mortgage payments being they could no longer afford it. Instead of moving we decided to, without putting our names anywhere on the mortgage, make the monthly payments. Today I mailed out the monthly payment and after coming home discovered a letter fromt the mortgage company saying that they were in default and had thirty days to pay a balance of over $1,000 or the home would be foreclosed. My question is since I am definitley not convinced that they can pay it, (even though they swear they worked out arrangements), should I stop payment on my check so I do not end up losing money, and also when it gets to the point of default is it even possible to "make arrangements"? FYI-there was never any sort of agreement of payment from us to them. Thank you so much for your advice!

pty · #2 10-11-2005, 11:01 PM

Quote:

Originally Posted by Harmony0800

My question is since I am definitley not convinced that they can pay it, (even though they swear they worked out arrangements), should I stop payment on my check so I do not end up losing money!

That's up to you. The mortgage company might not even accept the payment. For example, if the delinquency is $1,000, the payment is only $200, and there are no formal arrangements for the remaining amount, then there's a very good chance that they'll return the check. On the other hand, they might not return it. But without arrangements for the rest of the money, they'll simple 're-start' the pre-foreclosure process.

Quote:

Originally Posted by Harmony0800

when it gets to the point of default is it even possible to "make arrangements"

Sure arrangements can still be made. As long as the mortgage company and the mortgagor can reach an agreement on the terms.

Quote:

Originally Posted by Harmony0800

FYI-there was never any sort of agreement of payment from us to them.

I assume 'us' is you and your hubby, who is 'them'? Your in-laws or the mortgage company? I can tell you that the mortgage company will not even discuss the mortgage with you (because it's not your mortgage) unless your in-laws give them permission to do so.

If, in fact, the in-laws are giving the house to you, then you might want to consider getting a new loan in your names. And if you're able to do that now, then it would solve the entire foreclosure problem.

Samm1970 · #3 10-12-2005, 11:30 AM

I agree with pty. If you do plan to purchase the home, I would bring the mortgage current. Since the sale would be a "non-arms length" transaction, the mortgage company will want to see your parents payment history on the current mortgage. The fear for mortgage companies when it's a family sale is a bail out. Since you live in the property currently and the folks do not, you have this going for you and should be sufficient to remove any concern the mortgage company has about a bail out.

You could purchase the home 2 ways. The first is to file a quit claim deed or the state equivalent changing title from parents to you and the parents. Then you could refinance the loan into your own names, removing the parents since you'd now have an ownership interest in the home. You'll want to walk the quit claim through the county recording office if possible because the mortgage company is going to want to see you in title when the title search is done.

The other way you could do this is to complete a purchase agreement with your parents for the full market value of the home. They could provide you with a gift of equity for the down payment and closing costs. So basically let's say the value is $100,000 and your parents don't plan to make any money but they owe $50,000.00. The purchase agreement would show a purchase price of $100,000.00 and written into the contract would be a gift of equity for say $45,000, which would cover your down payment and closing costs. Leave some money because your parents will have some costs associated with the sale.

There may be gift tax issues, so consult your tax advisor. Then consult a mortgage person and do a pre-approval. Then consult an attorney for the quit claim deed or the purchase agreement. Your circumstances may dictate whether going the refinance route or the purchase route would be better. That's why it may make sense to consult with a mortgage professional before the attorney.

Don't let the home go any farther into foreclosure though. That won't help things.

PghREA · #4 10-12-2005, 06:00 PM

Quote:

Originally Posted by Harmony0800

What is the name of your state? Michigan

My question is since I am definitley not convinced that they can pay it, (even though they swear they worked out arrangements), should I stop payment on my check so I do not end up losing money, and also when it gets to the point of default is it even possible to "make arrangements"? FYI-there was never any sort of agreement of payment from us to them. Thank you so much for your advice!

This is your one chance to save the home from foreclosure, pay the $1,000.

Gadfly · #5 10-13-2005, 10:06 AM

Let's go back to the beginning.

When your in-laws "gave"you and your hubby the home what documentation did you get?

Was there any discussion about the status of the home prior to the marrage?

How is it you and especially your hubby had no clue as the the status of the house he was in?

This is a terrible way to start married life. I hope you learn something from this it sounds more like a Trojan Horse than a Gift Horse.

Harmony0800 · #6 10-13-2005, 10:50 AM

Okay, I will tell the situation slowly so that you can understand. My husband lived in the home long before I had known him. He actually grew up in it. When his parents decided to move a pretty far distance they let him stay in the home since he was going to college locally. When they moved they did not charge him rent since the home was paid for, ( and, yes, they told him that). Years later I come along and now we are married. *By the way, if I needed marriage advice I would ask for it. Please do not make any assumptions as some people may get offended and I am one of them. People get taken advantage of no matter of marriage status, race, or age. So that is irrelevant.* It was only ever called a gift in the sense after repeatedly asking them to let us pay rent. Their response, “No! No! There is no need to pay us rent, the home is paid for. Take it as a gift.” There was never any ownership transferred, nor did they tell us they took pretty much all the equity out on it and haven’t paid the payment for months. I hope that clears things up.

HomeGuru · #7 10-13-2005, 11:32 AM

Quote:

Originally Posted by Harmony0800

Okay, I will tell the situation slowly so that you can understand. My husband lived in the home long before I had known him. He actually grew up in it. When his parents decided to move a pretty far distance they let him stay in the home since he was going to college locally. When they moved they did not charge him rent since the home was paid for, ( and, yes, they told him that). Years later I come along and now we are married. *By the way, if I needed marriage advice I would ask for it. Please do not make any assumptions as some people may get offended and I am one of them. People get taken advantage of no matter of marriage status, race, or age. So that is irrelevant.* It was only ever called a gift in the sense after repeatedly asking them to let us pay rent. Their response, “No! No! There is no need to pay us rent, the home is paid for. Take it as a gift.” There was never any ownership transferred, nor did they tell us they took pretty much all the equity out on it and haven’t paid the payment for months. I hope that clears things up.

**A: I guess they lied then**************..

Gadfly · #8 10-13-2005, 11:50 AM

So bottom line (regardless of you race or age) is you were never given the house you have just been living there at no charge.

So sit down with your in-laws and have a heart to heart real honest conversation about the entire situation and if they intend to make good on the "gift" and if they plan on paying it off.

If they can't then see about getting your own mortage and buy it from them. If that does not work then go get your own home.

jtsda · #9 10-14-2005, 07:36 AM

Texas.

I called my mortgage company on Oct 1st to make payment for Sept because of a death in the family I failed to make the pymt w/in the month of Sept. which technically would be late anyway because it is always due on the 1st. They denied my payment stating I would now have to pay for Sept and Oct. I did not have that amount so I just mailed them the amount for Sept and will now make the Oct paymt. However, the payment for Sept that was sent right out has not been cashed and just yesterday I received a letter with notice of defalut and intent to accelerate. We have always paid our mortgage within the month due ( even if not on the 1st) and have had this mortgage for over 4 years and never once gone past the 30 days. Is it legal for them to deny the payment I sent and now try to default? If I do send the amount they are requiring what about the other check already sent?

I am absolutely sick about this and would appreciate any info.

Samm1970 · #10 10-14-2005, 11:03 AM

jtsda,

You should really start your own post but I'll answer your question anyway. The answer is yes it is legal. Personally I think it's bad business to handle it this way since you did call them, although you should have called them earlier in Sept.

Simply mail them the Sept & Oct payments by the end of Oct and you'll be out of default. Ask for your check back. If you don't get it put a stop payment on it. This will cost you money. Consider it the cost of learning a valueable lesson. Call you mortgage company anytime you're going to be late on a payment - not after you're late on a payment.

HomeGuru · #11 10-14-2005, 11:14 AM

Quote:

Originally Posted by Samm1970

jtsda,

You should really start your own post but I'll answer your question anyway. The answer is yes it is legal. Personally I think it's bad business to handle it this way since you did call them, although you should have called them earlier in Sept.

Simply mail them the Sept & Oct payments by the end of Oct and you'll be out of default. Ask for your check back. If you don't get it put a stop payment on it. This will cost you money. Consider it the cost of learning a valueable lesson. Call you mortgage company anytime you're going to be late on a payment - not after you're late on a payment.

**A: do not respond to hijackers. Make them start their own thread.

Mortgage Default

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Late Payment