question on a house title and mortgage

[DaWhim]

is it possible to have the mortgage on person A and the house title on person B?

if the mortgage is defaulted, what is the bank gonna do? sell the house?

 

[Vic]

No. You have to actually own the home to take out a mortgage on it. If this has already happened, be advised it is a form of the criminal banking fraud known as "straw buyer," and the bank will come after you with the sheriffs and a whole firm of lawyers to not only take the house but to make your next house a cozy prison cell.

 

[rpl318]

It is possible, but person A would have to buy the home and be on title at the time of purchase. After the purchase, person B can be placed on title and person A removed. This is what is know by many mortgage companies as an unconsented transfer and they may call the loan due and payable (60 days to refi elsewhere or they foreclose) if they learn of the transfer. The problem is that it is virtually impossible for the mortgage company to find this out as they do not actively monitor the title.

 

[DaWhim]

what actually happened was my mom took over my aunt's house (she owes us money). the title of the house is under my mom's name, but the mortgage is still in my aunt's.

this is in new york city.

 

[Vic]

Originally posted by: rpl318
It is possible, but person A would have to buy the home and be on title at the time of purchase. After the purchase, person B can be placed on title and person A removed. This is what is know by many mortgage companies as an unconsented transfer and they may call the loan due and payable (60 days to refi elsewhere or they foreclose) if they learn of the transfer. The problem is that it is virtually impossible for the mortgage company to find this out as they do not actively monitor the title.

Yes, this is possible, but virtually all mortgage contracts forbid it. The transfer from A to B is effectively a sale of the property and the mortgage is due and payable from that date. That person A is no longer on title would not stop any foreclosure proceedings, as the legal argument would be that B purchased (even if no actual consideration was involved) an encumbered property and should have acquired title insurance to make sure the property was free and clear of all previous liens and encumbrances.

 

[Vic]

Originally posted by: DaWhim
what actually happened was my mom took over my aunt's house (she owes us money). the title of the house is under my mom's name, but the mortgage is still in my aunt's.

this is in new york city.

Ah I see. I initially thought that you were planning on purchasing or refinancing a house with an off-title borrower for the purpose of intentionally defaulting on the loan. That explains my first post.

Now I see that the situation is more like how rpl318 explained. I assume that nothing has happened with the mortgage lender to this point because the mortgage payments are still being made in a timely fashion. Don't stop making them, as they can still legally foreclose if the mortgage goes into default (as I explained in my 2nd post).
The best advice would be for your mother to refinance the mortgage into her own name.

 

[DaWhim]

Originally posted by: Vic
Ah I see. I initially thought that you were planning on purchasing or refinancing a house with an off-title borrower for the purpose of intentionally defaulting on the loan. That explains my first post.

Now I see that the situation is more like how rpl318 explained. I assume that nothing has happened with the mortgage lender to this point because the mortgage payments are still being made in a timely fashion. Don't stop making them, as they can still legally foreclose if the mortgage goes into default (as I explained in my 2nd post).
The best advice would be for your mother to refinance the mortgage into her own name.

the problem is my aunt owes us about 130k and that's on the mortgage. I guess my aunt can just stop paying the mortgage without consequences? she does owns another house. the dumb part is the money they owe us is on verbal.

 

[MrChad]

Originally posted by: DaWhim

Originally posted by: Vic
Ah I see. I initially thought that you were planning on purchasing or refinancing a house with an off-title borrower for the purpose of intentionally defaulting on the loan. That explains my first post.

Now I see that the situation is more like how rpl318 explained. I assume that nothing has happened with the mortgage lender to this point because the mortgage payments are still being made in a timely fashion. Don't stop making them, as they can still legally foreclose if the mortgage goes into default (as I explained in my 2nd post).
The best advice would be for your mother to refinance the mortgage into her own name.

the problem is my aunt owes us about 130k and that's on the mortgage. I guess my aunt can just stop paying the mortgage without consequences? she does owns another house. the dumb part is the money they owe us is on verbal.

😕

If I understand Vic correctly, then if your aunt ceases to make mortgage payments, they can legally foreclose and your mom will lose the house.

 

[DaWhim]

Originally posted by: MrChad

😕

If I understand Vic correctly, then if your aunt ceases to make mortgage payments, they can legally foreclose and your mom will lose the house.

I can read. just to make sure 😛

 

[Vic]

No, the bank will take the house if your aunt stops making the mortgage payments. Their lien (mortgage on the house) predates the title transfer to your mother so they will have a valid legal claim with which to foreclose. In essense, your aunt gave the house to the bank first. If you'll pardon me, I think your aunt is trying to pull a fast one on your mom. What is the value of the house? If your mother could sell it for enough, she could pay off the bank and get her money back that way.

 

[DaWhim]

thanks for the valuable replies.

the really problem is my mom being dumb, that's all.

 

[PowerEngineer]

What do you mean when you say that your Mom "took over my aunt's house"?

I imagine that the bank that holds the mortgage also holds has a lien on the property, and that your aunt could not have signed ownership over to your mother without triggering a requirement to pay the balance of the mortgage. If your Mom's name isn't on the title, then maybe she has nothing (other than immediate possession of the premises?).

My understanding is that if the bank were to foreclose on the property, it would be sold to the highest bidder and any amount above the lien would be returned to the persons named on the title (i.e. your aunt?).

Good luck!