I am the administrator of my mother's estate and I have been living in her home and paying the mortgage for the home from my income for the past 8 years. About 2 years ago I attempted to modify the mortgage due to the ARM loan and high interest, but was denied because my mother had signed that the loan could not be assumed. Recently, the lender stated that eligibility requirements changed and that I could apply for a loan assumption and if approved, apply for a modification; however they would not give me eligibility requirements for possible modifications. My concern is that more is owed on the house than what it is worth and the current loan is less than ideal with rates increasing by 400.00 in July. I do not want to get stuck in a bad loan if it is assumed. As an administrator, can I sell the home for market value ( short sale) and apply for a loan to purchase it at market value? Is there a conflict with this? Also, if the house goes into foreclosure, will adding my name to the deed impact any foreclosure proceedings? The estate is currently opened.
There are a myriad of facts in the scenario you presented. Regarding "short selling" and "refinancing" concurrently, this is not be permissible. The purpose of a short sale is to eliminate your monetary entanglements with the lender... whereby they concede to accepting a lower amount due and owing...then the outstanding principal balance. The transaction is to be an "arms length transaction" by and between "unrelated parties". This is a highly regulated, unconventional closing transaction....with hardship criteria to be displayed, i.e. diminished income, "upside down" loan to home value ratio (LTV), etc.. What you propose is a "make shift" refinance scenario. It reflects ingenuity, but again, will not be permissible. With respect to the foreclosure proceeding, if you add your name as an "individual owner" to the home...via your designated authority as administrator of the estate....you will be deemed a vested owner...as opposed to an agent of the estate who is the current vested owner....and thereby be personally subject to service of process via the foreclosure action. If foreclosure is imminent, this tactic is ill advised. I have provided a generic response based on the facts as presented. I suggest you consult a local real estate attorney for more definitive guidance. Good luck to you.
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RIght is is a conflict you cannot short sale house to yourself and then buy it back. You should talk to a lawyer.
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The other attorneys are correct, this is a loaded question. You might want to consider risking letting the house go into foreclosure and then buying it at the sheriff sale (but you must have cash available). This is risky because someone may outbid you or the lender may set the upset price to bid higher than you want to pay. I suggest you sit down with an experienced real estate attorney to discuss your options. I wish you well.
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