Wrongful Colleratal / repossession

My question involves real estate located in the State of: OH

My parents have been going through this process the past couple of years. This does not seem "right," and I was hoping to get some advice I could give them.

My family owns a piece of property. The name on the mortgage, (MortA) secured from BankA is an LLC, which my family owns.

There was a business (BizA) leasing this property. They have since moved off the premises, and no longer lease the property. BizA also coincidentally secured a mortgage (MortB) from BankA. The collateral used to secure MortB is the property owned by the LLC.

In this case, the property is used as collateral for both MortA and MortB. We are not affiliated with BizA in any way. However, since the property is collateral for MortB, we are unable to sell the property.

At this point, my family has no income, and are unable to pay MortA. They have just been informed that BankA will be repossessing not only the property, but also any assets they personally own. This would include their house, and RV, which are worth an estimated $400K. To make matters worse, part of the leasing agreement was for BizA to pay the real estate taxes ($34K/year). BizA is not paying the taxes, and the bank is coming after my family for the monies. 17K is past due at this point.

We believe: It is a conflict of interest for the bank to use a single piece of property for collateral on two separate loans.

Also, since the property is owned by LLC, and the name on the mortgage is the LLC, my family should not be personally responsible, thus their personal properties should not be repossessed.

Does anyone know anything here that can help us out? My father worked 30 years to secure that property, which was to be his retirement income. There are still two of my sisters, and a brother all still living in the home, and all are students. My family will be evicted and will start from square one unless we can find a solution.

Duplicate post

https://forum.freeadvice.com/mortgages-refinancing-foreclosure-107/wrongful-repossession-508323.html

Let’s first dispense with this “conflict of interest” business which you claim was created when “BizA” secured a mortgage on the property from “BankA”.

In spite of your belief, that DID NOT happen!

“BizA” was a lessee of the property. A tenant CANNOT mortgage land it holds under a lease. Only the record owner(s) of the land can obtain the mortgage. No mortgage lender would be so careless as to loan money secured by a mortgage on land not owned by the borrower. Not unless the record owner pledged the property to secure the loan.

And that brings us to the central question of who does own this commercial property? Which your post does not answer! Because . .

First its “My PARENTS have been going through this process. “ Then, “My FAMILY owns a piece of property.” “The property is owned by an LLC. “The LLC’s name is on the mortgage.” “My DAD secured the property.” And lastly, ”WE” are unable to sell the property.”

You are telling us that a “family owned” Limited Liability Company took out “MortA”, which is now in default. Well, that may be so, but if so, I will give you odds that some member or members of the “family LLC” personally guaranteed that mortgage note!

Plus I will give odds that this “family owned” LLC functioned as the alter ego of its members and because of that the “members” aren’t going to be shielded from personal liability to the LLC’s creditors, including “BankA”.