A few years ago, my sister-in-laws fooled me into quitclaiming my home so she could take out an equity loan used to start her business. After getting the loan, she quitclaim herself and the property is back under my name. The business failed and she stopped making payments. I covered for her while she was looking for work. More than 3 years later, I'm still covering for her, even though she's been working for the past 2 years. She refused to take over making payments, and I'm afraid to lose my home if I stop paying. I have no idea if she continues to make withdrawal from the loan because she would not share with me the status of the loan. What can I do? I'm tired of covering for her.
If this loan was secured by your property and the loan is in default, the property is at risk of foreclosure. This sounds like it may have been a HELOC, which can alter your remedies. However, you have a number of options available to you both with the bank and potentially against your sister-in-law. You should consult with an attorney immediately.
The above is general legal analysis. It is not "legal advice" but analysis, and different lawyers may analyze this matter differently, especially if there are additional facts not reflected in the question. The above response does not create an attorney/client relationship. I am not your attorney until retained by a written retainer agreement signed by both of us. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here
From what i can gather your home is security for someone else's loan. That said, the bank has a secured interest in your home and if the loan that is secured by the interest goes unpaid the bank can foreclose on the loan. You should see a local lawyer familiar with real estate issues. A lawyer could help you to determine the current state of title and also help to figure out the complexities of the unpaid loan.
This is a general answer only and you should seek the advice of counsel to address facts specific to your circumstances.
Real Estate Attorney
The lender can foreclose if you stop making payments. One option is to assume the loan and thereby replace your sister-in-law as the borrower.