Mortgage

This is a discussion on Mortgage within the Business and Financial Law Questions forums, part of the Legal Questions & Answers Forum category; My sisters name is on my fathers mortgage. In January he walked away from the home. We filed a quitclaim deed and the bank received it. Her credit is being ...

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  1. #1
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    Mortgage

    My sisters name is on my fathers mortgage. In January he walked away from the home. We filed a quitclaim deed and the bank received it. Her credit is being dinged. How to remove her name entirely from the mortgage?


  2. #2
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    Pay it off completely.

  3. #3
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    There are a bunch of issues here. Did the bank accept the quit claim deed and if so, does your sister understand that she has little to no rights under a quit claim and accepts that there are or may be claims/leins against the property. Act quickly.

    First, get a real estate comparative to find out if the property is under water (sister owes more than the property is worth). If not, sell it. But, you will have to sell it a pro or sell it below market value because you have merely a quit claim deed. Should not be a real problem under the circumstances.

    If under water, I would talk to the bank about a short sale. Here, you negotiate with the bank. Your position is that if you walk away, the bank is stuck with the real possibility of vandalism to the the dwelling, maintaining the dwelling and paying taxes. Banks are not in the business of selling houses. Soooo, you get the bank to agree to a sale at let's say 20% less (short of) the market value.

    In this scenario, the bank writes off the loss. It goes on sister's credit rating but she avoids a default judgment (bank sells house and collects the difference from sister). This is the worst case for sister.

    Lastly, and this is a drastic move but not fatal. Sister can declare chapter 7 bankruptcy which will destroy any claims by the bank and other creditors unless sister signs reaffirmation agreements (her lawyer will explain). Good luck on this one.

    Relative issues for legal beagles to think about. Is Sister the Mortgagor or Mortgagee? Why are Bankruptcy chapters in Odd numbers? What is a Chapter 9 bankruptcy?

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    I am very appreciated


 

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