beneficiary is in mortages holders name

[monnickasmommy]

What is the name of your state? AZ

My parents have a question

My mom and dad are in there Late 40's , they have a house that is a FHA home they will have it paid off in 10 years They have lived in for 22 years. However, the beneficiary is in mortages holders, how do they get that changed to put it in one there kids name.

 

[nextwife]

The "beneficiary" of WHAT? A mortgage life policy?

 

[monnickasmommy]

I will be more clearer -

If my parents where to die lets say Tomorrow, the home they live in will go to the mortages holder, they are the next beneficiary on the deed, how do they get this changed - ?

They do not want to it to go back to the mortage company they have paid for 20+ years. The house has 10 years to go befor it is paid off. They both have $100,000 life insurance policys that would pay off the house, if something was to happen.

Everything else they own except credit cards are paid off and one auto they have less then 2 years to payoff.

 

[nextwife]

Could you please state what form of deed they have and EXACTLY what it says?

 

[monnickasmommy]

I will get back with you later today to have word for word what the papers state.

 

[HomeGuru]

You are confused and thus we are confused.

 

[monnickasmommy]

Sorry it took a while to get back

Word for Word on Deed

First American Title Insurance Company of Arizona
Loan Amount 42,000
Owner to Be Insured

1. Proposed Lender to be Insured

United States of America, acting through
Farmers Home Adminstration

2. The following estate herein describes upon insurance the policy shall be in dad & Mom, his wife, as joint tenats with the right or surviorship.

3. The loan and assigments, if any to be a Deed of Trust to secure an undebtedness in the original principle amount of 42,000, dated, recorded in the book of records on page __
Trustor: Dad and Mom, his wife as joint tenats.
Trustee: Blank
Beneficiary: United States of America, acting through Farmers Home Adminstration .
April 23, 1982 07:30 am
______________
Real Estate Deed of Trust For Arizona with Assigments of Rents

List no Beneficiary Dated 10-07-1982 3:55 pm

__________________
Question is if both my parents die who gets their home they have paid on for 22 years ?

How can they change Beneficiary- Which one do they go by ?

If any one can help please do, they would like to get this changed as soon as possible.

 

[Bigfoot]

Changing the beneficiary can only be done by the policy owner. It's possible that your parents were duped into buying a decreasing term insurance policy, naming the mortgage co (US Gov't?) as the beneficiary. The intent was (is) to have the funds needed to pay the mortgage in its entirety upon their death.

First-- find out who took out the policy. If the mortgage purchased the policy, they are using some of your parent's payments to cover the cost of the insurance. If it was taken out without their signature or knowledge, then you're bringing up an issue that could make for a very interesting battle.

I generally tell people not to list the mortgage co as beneficiary. Rather they should name a family member who will be caring for the minor children if any). This way, the family can use the proceeds for any needs that surface, besides the mortgage.

 

[I AM ALWAYS LIABLE]

My response:

Oh, please people!

This has nothing to do with "insurance". The United States holds the title and mortgage until it's paid in full. If the Mortgagors both die, then the dwelling goes to the FHA automatically without having to go through Probate or a Foreclosure. The dwelling would then be re-sold, and any equity would be returned to the Estate of the deceased parents.

That's it. That's all. Nothing wrong or fancy about it.

This is done so people, like our writer, can't sell the dwelling and run off with Taxpayer dollars. If there's a balance owed at time of death, this is the only efficient way, and least expensive way, for the government to get MY tax dollars back that were given to the original owner of the dwelling.

This is really a simple concept.

IAAL

 

[monnickasmommy]

Thank you for your reply that was the answer they needed now hopefully they wont die until it is paid off

 

[nextwife]

"First American Title Insurance Company of Arizona
Loan Amount 42,000
Owner to Be Insured

1. Proposed Lender to be Insured

United States of America, acting through
Farmers Home Adminstration

2. The following estate herein describes upon insurance the policy shall be in dad & Mom, his wife, as joint tenats with the right or surviorship.

3. The loan and assigments, if any to be a Deed of Trust to secure an undebtedness in the original principle amount of 42,000, dated, recorded in the book of records on page __
Trustor: Dad and Mom, his wife as joint tenats.
Trustee: Blank
Beneficiary: United States of America, acting through Farmers Home Adminstration .
April 23, 1982 07:30 am
______________
Real Estate Deed of Trust For Arizona with Assigments of Rents

List no Beneficiary Dated 10-07-1982 3:55 pm"



First of all, what you are quoting is not the Deed language, it is Schedule A of a Mortgagee's Policy of Title Insurance.

Ok, now we don't use Deeds of Trust here, however, the title policy seems to be stating (and , further, insuring) that Title is vested in:

" dad & Mom, his wife, as joint tenants with the right of surviorship"

And that the beneficiary of the mortgagee's policy is The Farmers Home Administartion, who is securing their collateral interest and rent assignment by a Deed of Trust, and insuring their DOT by a mortgagee's policy issued through First American Title. The mortgagee's policy does NOT transfer ownership, it protects the lender's collateral in the event of a title failure or intervening lien. Just as with any mortgage, it must be paid off before proceeds of a sale may be paid to the owners. The secured collateral protects the lender's interest. AS long as the mortgage does not default and your parents do not sell to another, the mortage may stay in place, and ownership will not be lost.

http://www.realestatelawyers.com/Deed-Trust.cfm

"What Is A Deed of Trust ?

This is the mortgage document. It is recorded among the land records, and your lender will keep the original. When you pay off the loan, the lender will return it with the promissory note. This document is rather lengthy -- and quite legalistic. Make sure that the person conducting the settlement fully explains all of the ramifications and conditions contained in this document. Basically, so long as you make your monthly payments on a timely basis, you should have nothing to worry about. But once you are in default (a term which is defined in both the note and the trust) then many of the provisions of that deed of trust become operative -- such as the right of the lender to ultimately foreclose on your property.

It should also be noted that you cannot deduct any mortgage interest for tax purposes unless your property is secured by a deed of trust. That means that the deed of trust must be recorded in land records."