Posted on: 29th Sep, 2010 05:11 pm
please let me preface this question by saying that i am new to this forum. before posting this i have searched for an answer to the following question and have not found one yet. so please, no flaming.
fyi #2, i have been accused of mortgage fraud by the person threatening to sue me, but the mortgage broker that detailed our transaction was a personal friend of theirs and clearly stated we did nothing wrong.
i live in texas, and bought a home in may. i signed a $150,000 mortgage to a mortgage company, and a $50,000 promissory note to the owner(s). the home appraised @ $202,400 and the reason we paid $200,000 was because the seller(s) would carry the $50,000 balance until we sold the home or 5 years, which was clearly stated in the promissory note, whichever came first. the benefits, they sold the home at near appraised value, and we had a cheap house payment (we are planning to move in about 5 years).
we signed the promissory note and mortgage, and one of the sellers (husband) passed away before we even moved into the home. we signed in may, and he passed away in july. (we gave the widow a month of leeway (which she promptly took and turned into 3 months) to move out) we (finally) moved into the home in august and she promptly sent us a letter stating we had until the end of september to pay her the $50,000 because of the death clause listed in the promissory note.
we (obviously) do not have $50,000 to give her right now, and i have met with her repeatedly (3 times) to explain that we can make payments to her (detailing a 5 year plan with a lump sum payment at the end of the 5 years). she is now threatening to sue me, and saying things like, "you committed mortgage fraud", and, "you can go to jail for 2 to 10 years, it's a federal felony". she also said, "you are going to pay all of the attorney fees".
the worst part of this is that the reason she needs the money is that right before the seller (husband) died, he bought a home that appraised for $515,000, paying around $800,000 for it! he evidently wanted the home a whole lot, and his wife, who was the executor at the time, let him! she was not planning to move into the home he was buying, she was clearing the renters out of their other home.
now her financial situation is (very obviously) unsustainable and she wants us to pay up. she (before become angry and rude at my very sight) even told me that my $50,000 was only a band-aid, and she would still go bankrupt soon without selling the other home.
all that to ask...
can we take another mortgage (or line-of-credit, or home equity loan, or something) to pay her off? on paper we have $50,000 in equity in the home.
if i cannot take out another loan, and if i am sued, can she take the home from me? the promissory note is secured by the home, but if the only thing she can gain by suing me is a lien on the home, i do not have a problem with that, that is what this promissory note was supposed to be originally.
also was a "federal felony" committed when we did this process???
well thanks for reading... fyi my wife and i both have excellent credit scores and are open to any forms of resolution in this situation.
fyi #2, i have been accused of mortgage fraud by the person threatening to sue me, but the mortgage broker that detailed our transaction was a personal friend of theirs and clearly stated we did nothing wrong.
i live in texas, and bought a home in may. i signed a $150,000 mortgage to a mortgage company, and a $50,000 promissory note to the owner(s). the home appraised @ $202,400 and the reason we paid $200,000 was because the seller(s) would carry the $50,000 balance until we sold the home or 5 years, which was clearly stated in the promissory note, whichever came first. the benefits, they sold the home at near appraised value, and we had a cheap house payment (we are planning to move in about 5 years).
we signed the promissory note and mortgage, and one of the sellers (husband) passed away before we even moved into the home. we signed in may, and he passed away in july. (we gave the widow a month of leeway (which she promptly took and turned into 3 months) to move out) we (finally) moved into the home in august and she promptly sent us a letter stating we had until the end of september to pay her the $50,000 because of the death clause listed in the promissory note.
we (obviously) do not have $50,000 to give her right now, and i have met with her repeatedly (3 times) to explain that we can make payments to her (detailing a 5 year plan with a lump sum payment at the end of the 5 years). she is now threatening to sue me, and saying things like, "you committed mortgage fraud", and, "you can go to jail for 2 to 10 years, it's a federal felony". she also said, "you are going to pay all of the attorney fees".
the worst part of this is that the reason she needs the money is that right before the seller (husband) died, he bought a home that appraised for $515,000, paying around $800,000 for it! he evidently wanted the home a whole lot, and his wife, who was the executor at the time, let him! she was not planning to move into the home he was buying, she was clearing the renters out of their other home.
now her financial situation is (very obviously) unsustainable and she wants us to pay up. she (before become angry and rude at my very sight) even told me that my $50,000 was only a band-aid, and she would still go bankrupt soon without selling the other home.
all that to ask...
can we take another mortgage (or line-of-credit, or home equity loan, or something) to pay her off? on paper we have $50,000 in equity in the home.
if i cannot take out another loan, and if i am sued, can she take the home from me? the promissory note is secured by the home, but if the only thing she can gain by suing me is a lien on the home, i do not have a problem with that, that is what this promissory note was supposed to be originally.
also was a "federal felony" committed when we did this process???
well thanks for reading... fyi my wife and i both have excellent credit scores and are open to any forms of resolution in this situation.
you certainly didn't break any laws, commit any federal felonies or do anybody any wrong - you bought a house and financed it with a typical first mortgage and this private second mortgage.
maybe i should have asked this before i made those declarative statements, though - did you know the guy was going to die? that might have been fraud, if you had firsthand knowledge of the date of his death.
she's scared, she's probably sad, and she wants the money because she needs it. you are being noble in trying to find a solution. i believe it's going to be a very difficult task for you to obtain a second mortgage that will pay this off. my quite-lmiited knowledge of the law in texas leads me to believe that you cannot obtain a second mortgage on your home.
call around to the banks/lenders etc. to ask - you've got nothing to lose. but please don't let this lady scare you - you cannot go to jail for the felony that she accuses you of. a different felony, perhaps, but not what she claims.
maybe i should have asked this before i made those declarative statements, though - did you know the guy was going to die? that might have been fraud, if you had firsthand knowledge of the date of his death.
she's scared, she's probably sad, and she wants the money because she needs it. you are being noble in trying to find a solution. i believe it's going to be a very difficult task for you to obtain a second mortgage that will pay this off. my quite-lmiited knowledge of the law in texas leads me to believe that you cannot obtain a second mortgage on your home.
call around to the banks/lenders etc. to ask - you've got nothing to lose. but please don't let this lady scare you - you cannot go to jail for the felony that she accuses you of. a different felony, perhaps, but not what she claims.
Oh yeah....welcome to our forum, Micah. I hope your experience will be profitable, and that you'll be able to contribute in your own way.
I appreciate the reply. No I did not know the date of his death. When I signed the promissory note, he was not terminal (to my knowledge). I (obviously) would have mentioned the death clause if I had any inkling that THIS was going to happen... He became terminal and passed very quickly.
I guess I should have mentioned this in the first post but it slipped my mind as I was writing. The $50,000 that I signed the promissory note for was listed as a "gift of equity" on the mortgage statement. The broker that they used said this was necessary to facilitate the $150,000 mortgage note, and give them the $50,000 after.
I guess I should have mentioned this in the first post but it slipped my mind as I was writing. The $50,000 that I signed the promissory note for was listed as a "gift of equity" on the mortgage statement. The broker that they used said this was necessary to facilitate the $150,000 mortgage note, and give them the $50,000 after.
Terrific post, I will be sure to come back and visit!
Sad to say, your merry widow isn't all that wrong in talking about mortgage fraud. That "gift of equity" that was secured by a mortgage is 100% fraud, and you were a party to it, I'm afraid. Does that make you culpable in full? I dunno that - your broker certainly ought to be reported to the proper authorities - especially in 2010!
In my earlier response, I forgot about the death clause. Obviously, that's a factor in her desire to get paid in full. Her methods aren't what they ought to be, but it sure looks like she's right on in her demands. Since your broker is so slick, maybe he can wangle a way for you to get the $50K and pay her off. He certainly ought to try - he's done some serious damage already.
In my earlier response, I forgot about the death clause. Obviously, that's a factor in her desire to get paid in full. Her methods aren't what they ought to be, but it sure looks like she's right on in her demands. Since your broker is so slick, maybe he can wangle a way for you to get the $50K and pay her off. He certainly ought to try - he's done some serious damage already.
In our last "meeting" she said that the agreement (promissory note) was between her late husband, and me, and that she "did nothing wrong" and that she did not want anything to do with this situation. EXCEPT for the fact that apparently, she will wave this (evidently) fraudulent document at me all day if it will get her $50,000.
So basically I am being extorted right now... it's a "pay up or i'll tell" situation... right?
I read somewhere about the Texas A6 law. Do I have an A6 mortgage? I believe it was a conventional loan (whatever that means). Also what is the amount of time I must wait before refinancing after I have bought the home? Is there any way to pull some money out of the home?
So basically I am being extorted right now... it's a "pay up or i'll tell" situation... right?
I read somewhere about the Texas A6 law. Do I have an A6 mortgage? I believe it was a conventional loan (whatever that means). Also what is the amount of time I must wait before refinancing after I have bought the home? Is there any way to pull some money out of the home?
i can't comment on timing now, micah; i gave up the originating gig early this year and don't keep up on everything now. i have a feeling that you'll likely have to wait until next spring, but beware because texas has some funny laws about refinancing. check into those (i tried to work out a refinance for someone in texas a couple of years ago, so i recall difficulties of all sorts. i thought i had it all worked out, but it got declined anyway - too much cash out or something).
check with your favorite lender (not your widowed friend, obviously) and see what they tell you about the refinancing laws.
i guess you could say you're being extorted, yes; though i suppose most any spouse who didn't approve of what her now-deceased partner was doing might just feel the same way.
check with your favorite lender (not your widowed friend, obviously) and see what they tell you about the refinancing laws.
i guess you could say you're being extorted, yes; though i suppose most any spouse who didn't approve of what her now-deceased partner was doing might just feel the same way.
Yes, this was me...I forgot to log in first:
I can't comment on timing now, Micah; I gave up the originating gig early this year and don't keep up on everything now. I have a feeling that you'll likely have to wait until next spring, but beware because Texas has some funny laws about refinancing. Check into those (I tried to work out a refinance for someone in Texas a couple of years ago, so I recall difficulties of all sorts. I thought I had it all worked out, but it got declined anyway - too much cash out or something).
Check with your favorite lender (not your widowed friend, obviously) and see what they tell you about the refinancing laws.
I guess you could say you're being extorted, yes; though I suppose most any spouse who didn't approve of what her now-deceased partner was doing might just feel the same way.
I can't comment on timing now, Micah; I gave up the originating gig early this year and don't keep up on everything now. I have a feeling that you'll likely have to wait until next spring, but beware because Texas has some funny laws about refinancing. Check into those (I tried to work out a refinance for someone in Texas a couple of years ago, so I recall difficulties of all sorts. I thought I had it all worked out, but it got declined anyway - too much cash out or something).
Check with your favorite lender (not your widowed friend, obviously) and see what they tell you about the refinancing laws.
I guess you could say you're being extorted, yes; though I suppose most any spouse who didn't approve of what her now-deceased partner was doing might just feel the same way.
Does Texas have the same requirements for taking a line of credit out of the home? (i.e. the 80% rule) We are considering selling the home BUT we technically owe 199k and the home appraised @ 202k. We will take a hit on the sale incl. closing costs and realtor fees... We would LOVE to stay in the home but cannot think of any ways to come up with 50k.
Hi micahsublett,
As far as I know, in Texas, the rules for taking out a line of credit is similar to that of other states. If you cannot afford your mortgage payments, you can ask your lender to offer you a loan modification wherein the rates and terms of your mortgage payment will be changed. You'll get an affordable payment plan to pay off the dues.
Thanks
As far as I know, in Texas, the rules for taking out a line of credit is similar to that of other states. If you cannot afford your mortgage payments, you can ask your lender to offer you a loan modification wherein the rates and terms of your mortgage payment will be changed. You'll get an affordable payment plan to pay off the dues.
Thanks