Posted on: 01st Feb, 2010 05:57 am
A loan of $43 000 was granted to an 89 yr old lady, to be repaid over a period of 20 years. This loan was granted based on paperwork she tabled for a small 2 bed 1 bath home. The property has a carport and an attached shed which was erected before the loan was granted. I don't think any inspection of the property was done by the Lending Company?? and not survey was done. The carport, shed and concrete slab is an encroachment on a piece of property that she deeded to her son a couple of years ago. She is not in a position to repay the loan. Her daughter is taking steps to have the carport taken down, leaving the concrete slab behind. They are not able to provide a "clear" Title. The daughter has advertised the home in the newspaper. Would the Lending Company not have to be consulted about the property fixture (carport & shed) demolition? Is a Quick Sale approved by the Lending Company not a better suggestion? The encroachment is 16ft over on the other property.
Hi Hannah,
If the daughter to going for any major changes in the property, then it is better to inform the lender about it. If the old lady is unable to pay off the loan, then she should contact her lender and apply for a short sale. This will help her in getting rid of the property. However, she would be liable for the deficient amount resulting from the sale.
If the daughter to going for any major changes in the property, then it is better to inform the lender about it. If the old lady is unable to pay off the loan, then she should contact her lender and apply for a short sale. This will help her in getting rid of the property. However, she would be liable for the deficient amount resulting from the sale.
Thankyou for reply. Glad to better understand how to approach such a predicament. Apparently the Lending Company (after learning about the encroachment) understands and agrees that they cannot sell the property without the parties agreeing to either move the property line, which would mean that the 16ft would have to be sold or given, or remove the encroachment, which is an improvement to the property and a fixture, worth about $7000. It was erected in 2002.
If heaven forbid, this elderly lady passed away before this is resolved - the property and the problem would become the Lenders entirely, right? Would the son, who will inherit the 2 acres adjoining the property the home is built on, have first option to purchase the property, or is it up to the Lending Company to dispose of the debt and property as prescribed in their policy?
If heaven forbid, this elderly lady passed away before this is resolved - the property and the problem would become the Lenders entirely, right? Would the son, who will inherit the 2 acres adjoining the property the home is built on, have first option to purchase the property, or is it up to the Lending Company to dispose of the debt and property as prescribed in their policy?
Hi Hannah,
On the death of the elderly lady, though his son would inherit the property, he won't be responsible for the loan. In that case, if no one pays the mortgage, the lender will foreclose the property and sell it off to recover his dues. However, if he refinances the loan in his name, then he would become liable for the loan.
Thanks
On the death of the elderly lady, though his son would inherit the property, he won't be responsible for the loan. In that case, if no one pays the mortgage, the lender will foreclose the property and sell it off to recover his dues. However, if he refinances the loan in his name, then he would become liable for the loan.
Thanks