foreclosure on property with life estate tenant

Hi mike!

Welcome to forums!

If you have given a loan to a person and the property has been held as the collateral, then you will be able to foreclose the property, However, the person, who has the life estate rights, will have to sign the property deed in your favor.

Feel free to ask if you've further queries.

Sussane

I assume you made the loan to the trustee and that is whom you want to foreclose against. The problem is the life estate holder owns the property until they die. If you made a loan to the trust, which holds a remainder interest, the trust does not become the owner until the life estate holder dies. Any security interest you have is in the remainder interest. So you can foreclose on the remainder interest, but you will have to wait until the life estate holder dies before you actually own the property to sell in order to satisfy the loan.

jheard, does that same rule also apply if the person with the life estate has signed the loan documents and mortgage too?

Rule may vary from state to state. You should contact a local real estate attorney and take his/her opinion in this regard.

Gaffer, the interests would merge and you could foreclose on both (assuming no other interest holders).

Thanks for sharing your opinion JHeard!! :)