Your question is a bit complicated. The term "trustee" usually involves a trust, and I don't see in the facts given that a trust was ever created. Perhaps you are referring simply to the power of attorney that the uncle held, giving him the ability to sign for his mother (your grandmother). There are several separate issues involved here, which makes answering very problematic. First, the uncle's lien against grandma's home could be valid if she did in fact borrow money and never repaid or defaulted on her repayments. The second issue that I see is that he took a loan against her home as the POA. Was the loan for her benefit or his? There could be some fraud involved, but if the $43K was used for her benefit, then there may not be an issue. The third issue is that both are deceased at this point, so it may be difficult to find the documentation that will solidify what is actually going on. Because this involves two decedent estates, and a multitude of issues, I would advise you to consult with a probate attorney.
Answers by this attorney are merely to provide educational information on topics related to estate planning. This site is not meant to be a substitution for legal advice from an attorney hired to give customized advice for your specific situation.