QUESTION
Can she get a mortgage loan without their consent or is that illegal to do so?
Asked on Sep 04th, 2015 on Estate Planning - Michigan
More details to this question:
My girlfriend’s great grandfather passed away 15 years ago and left his old house to his great grandchildren. All 3 names are on the deed. The brother didn't want anything to do with the house, but the sister went and got a mortgage loan without the consent of her the other 2 siblings. Now she's trying to sell the house, pay back the mortgage company what she owes and pocket the rest. My girlfriend wants to keep the house, but sister is trying to sell it, and use the money to pay back what she owes and pocket the rest. If this is an illegal transaction either thru mortgage company or sister, what should my girlfriend do next? She called the mortgage company to see how much was owned and they told her they couldn't give that information because her name wasn't on mortgage but her name is on deed of house.
1 ANSWER
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Consent from all titled owners of the property should have been obtained by the mortgage company before issuing mortgage. The sister can only mortgage her interest in the real property and cannot obligate her brother and sister without their consent. Although it is possible to mortgage property without all title owners being on the mortgage, their consent and waiver is necessary. It sounds as though the mortgage company erred in not obtaining their consent. Have your fianc?e check her credit report to see if the mortgage is reporting on her credit. If it is, then that indicates that her information was used to obtain the mortgage, even if the mortgage is not in her name. Then there are other legal remedies available. Should the mortgage company attempt to foreclose she can avoid liability by demonstrating that they had no privity with her, that is no direct connection, and have no right to foreclose on her interests. Also, to sell the property, the sister will have to have the siblings consent and the can instruct the closing company to pay their respective shares to them and not the sister. Finally, there may be a criminal action against the sister if the circumstances dictate.
Answered on Sep 10th, 2015 at 11:16 AM