My mom discovered a home equity loan (2d mortgage) that my dad has obtained by the bank without her consent. The house was used as collateral. The bank won't give her any info on that loan since it's only in my dad's name ." my dad has stopped making pymts on the home equity loan and may be in default. My mom pays on the principal residence which is almost paid off. What options does my mom have against the bank or my dad for protection? Can she be liable on losing her home when she never consented to the 2nd mortgage? How can she make the bank (who also is the mortgagor) remove the home as collateral? Is the fact that Maryland is a lien theory state relevant? This doesn't seem just. How can a co-owner be liable for something they didn't consent to regarding jointly owned property?
Tom is correct in saying that unless both owners of the property have signed a mortgage, it will not be a lien against the property.
However, before granting a line of credit loan on the property, most lenders will require that a title search be performed. That search will determine who owns the property, and the lender should get all of the owners to sign the mortgage. Your mother may wish to check the land records for the house to be sure that her ownership interest actually exists.
If the land records do not show that your mother is an owner of the property, and she believes that she should be, then she may have further questions to ask about why she is not an owner.
Sadly, a very common set of facts in our office. If Mom did not sign the lien instrument, then the mortgage cannot be secured to the real property. And if the property was owned as husband and wife, then a lien instrument signed by Dad, only, would not secure the lien to the property.
For some reason, I've seen a bunch of these cases over the past few years. The things to do next are (1) you really have to hire an attorney b/c this is not stuff you can clear up yourself; (2) order a title report and copies of all lien documents (this will show what's on record and who purportedly signed documents; (3) if there is a lien, and it has a signature that's not your, you are going to want to go and get a hand-writing expert to review the signatures and confirm aht it is not your signature; (4) after you get the materials, you evaluate all of the options. Theoretically, you can simply wait til the bank with the bad loan tries to foreclose, but candidly that's just a pain; better part of valor is to file a complaint to "quiet title" to the property. Sometimes, you can draft the suit and then send it to the lender with a request that they voluntarily release the lien.
But, in my experience where "imposter" / "forger" is a family member, the banks will assume and argue that there some type of collusion involved and they will not go away willingly. that's why you have to get the documents and get a handwriting analysis done early in the process before you go to the lender.
NOTE that the title company/lawyer and the notary public who did the transaction are all going to be defendants in any action that you bring (i.e. you're going to file suit to "quiet title" and for damages against the title company / notary etc who failed to properly detect the forged signature.
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