Home Purchase to Assist with Friend about to lose home

[Wizhk]

California.

August 1st 2012 a friends mother ran out of money and was unable to make her mortgage payment. A Real Estate Sale Contract was signed to purchase the property from her by taking over the current loan and/or re-finance the current loan amount. I was to also pay her $75,000 in 3 installments. She was to live there until the $75,000 was paid out while paying me a monthly sum as rent while she stayed. I paid her gardener, pool man, internet, and took care of fixes on the house.

I continued to make her mortgage payments for months and paid her the $75,000. She has since stopped paying rent and has retained an attorney claiming elder abuse. I have now received a notice of rescission on the deed and her attorney is stating that we need to work out a reasonable amount for the tenant to pay back to me less then the close to $100,000 she has in debt to me.

The bigger problem here is that the woman is not working, has minimal government income, and can not pay the house payments let alone pay me back what I have given her. She burned through 1.5 million dollars in a few years and her house is cluttered form her hoarding practices.

My intention when making this transaction was to let her stay there a couple of years and then when she moved out sell the property for profit. Now I am looking at being taken off the deed and trust that she will find a way to pay me back.

I did not go into this begging to buy her house from her, I did it reluctantly to help my close friends mother.

Any advise please.

Thank You

Steve

 

[John Se]

California.

A Real Estate Sale Contract was signed to purchase the property from her by taking over the current loan and/or re-finance the current loan amount. I was to also pay her $75,000 in 3 installments. She was to live there until the $75,000 was paid out while paying me a monthly sum as rent while she stayed.

I have now received a notice of rescission on the deed


Steve

You say you have a contract for deed or the deed? Did this deal go through escrow with title insurance or is it a contract for deed situation?. What is this notice of recission on the deed?, as far as I know there are no go-backs if the house was deeded to you.

Normally this would be a sale with the owner carrying back a note for 75K, did you refinance the existing mortgage? What is the market value and how much is owed? This decides whether its worth fighting for.

First things first, who is on the title, who is on the mortgage? Is there a lease?
If you have the deed, she is just a tenant with a note owed and I dont think it matters what house the debt is owed on to her.

 

[Wizhk]

Thanks for the clarifying questions.

I was added on to the deed with the current owner, so you can say it is a deed situation. The notice of rescission is a document that her attorney created stating that the purported Trust Transfer Deed recorded at the county Recorders office transferring real property from "(Victims) 2006 Trust" to %50 myself and %50 the "Victim" is null and void, and is cancelled and rescinded.

1. "Victim" had no intent to transfer or deliver any interest to myself or anyone else.
2. The signature of the "Victim" on the subject grant deed was obtained by trickery and was a result of fraud, undue influence, duress and the transaction was and is unconscionable.

I have not refinanced the home as I was hoping to take over her low interest loan payments (only later to find out they were interest only). Still she is a serious Hoarder and I don't believe that I could have gotten a refinance in its current condition.

The Bank notes owed on the property total $527,000 and I paid her an additional $75,000. A fair value for the property is $780,000 - $800,000 in a better condition. I believe that I could have it prepared to sell for around $50,000 to take a profit of roughly $125,000.

The "victim" is on Title and Mortgages. I only have a contract and my name shared with her on the Deed. (Unless it can somehow be rescinded.)

Steve

 

[John Se]

You definately need your own attorney, If your on the deed then, sell the house divide the proceeds, you may get your money back. If they dont want to sell then you need an attorney to sue for partition or settle in some way. I feel for your situation pretty serious bucks on the line.

Also How is title held, Tenancy in common?

 

[Wizhk]

I was afraid this was a serious situation. I will look into getting an attorney.

I am not on the title at all.

Can I place a "Judgment Lien" against the property for in case she gets foreclosed on or sells? Are there any other things that I can do to try and protect my interest?

Thanks a lot

Steve

 

[Dave1952]

I'm confused. You have a deed which is signed by this woman for a house that is owned by a trust? Wouldn't you need the trustee's signature on the deed? Did you have someone advise you on this deed? Did someone research the title?