QUESTION
FHA loan papers required mom and dad to sign as sellers to put loan in son''s name. We did not sign by their mistake
Asked on Mar 15th, 2012 on Real Estate - Nevada
More details to this question:
NEVADA - Originally, my husband, myself and our son were on the title to the property. Loan for
mortgage was given to my son. At the time, the mortgage co was to have my husband and myself sign
as sellers of property. They did not. One year after the fact, they sent ORIGINAL FHA loan documents to my son
to have us sign them. We never did. That was in 2005 ¿¿ loan was in 2004. To this day, our name
is on the county¿¿s records as owners of the property. If my son who is the only person on the
mortgage has defaulted, if he files bankruptcy and wants to return the property to the mortgage co,
what happens to the property and what are my husband and my rights regarding it? We have removed
his name from the property via the county with a grant bargain sale deed per his request. What
rights to we have to the property, can they foreclose, how long after he files bankruptcy before the
mortgage would do anything, or can they? He is currently in Virginia and property in Nevada - please answer correct
1 ANSWER
R. Christopher Reade
I am not precisely certain as to the nature of your issue. It appears that there are three people on title (Father, Mother, Son) but only one person on the Promissory Note (Son). It is not clear if there is only one person (Son) on the Deed of Trust which secures the loan for the Subject Property.
If your son defaults on the loan and either (a) allows the property to proceed into foreclosure; (b) agrees to a Deed in Lieu of Foreclosure; or (c) files bankruptcy and relinquishes the Subject Property back to the Lender, your rights to the Subject Property are not clear. You indicate that you have taken Son off of title to the Subject Property by Deed, which really does not address the rights of the Lender to foreclose upon its interest in the Property. The Lender's rights to foreclose (and against what rights in and to the Property) are going to depend on who signed the Deed of Trust and when. You would be well served to bring all of the loan and title documents to an attorney to have him/her review the documents (as well as the title history) to determine the respective rights and position of the Lender in relation to you.
Answered on Apr 14th, 2012 at 1:17 PM