|>Getting off of a deed and loan
|Posted by: Used up grandma and grandpa Sep 16 2003, 10:33 AM
|In 1992 we co-signed a balloon morgage loan for our son and his wife. All four names went on the loan and deed. The balloon loan was modified in 1997 to a 25yr. fixed rate. We signed that loan also. Our son has made all payments on his house and we wish to remove ourselves from the deed. Is there a way this can be done that will also remove us of all financial responsibility? Our son and wife were able to get an equity loan without our knowledge or consent—how could that have happened? Did a bank make a mistake? Are we in any way responsible for a loan aquired without our agreement on property where our name is on the deed Thanks for any help you can give us.
|Posted by: loanuniverse Sep 16 2003, 10:36 AM
|Grandma & Grandpa:
First, lets make clear what you are responsible for and what you are not:
You are only responsible for the loans that you signed for! This means that only the 1997 refinancing is the one for which you are responsible. Assuming of course that the refinancing paid the 1992 loan in full and a satisfaction of mortgage was issued.
Now on to the other questions:
removing yourself from the deed and from financial responsibility:
Removing yourself from the deed is easily accomplished by filing a quitclaim deed. This is similar to granting them your interest in the property. Nevertheless, you will still be liable for the 1997 loan. The only way you could remove yourself from that responsibility is either by getting the lender to agree to release you or having your son apply for another loan on his name only and using this to pay off the 1997 loan.
Did the bank make a mistake by not requiring your consent for the home equity loan? Well, they don’t need your consent to lend money. They need your consent to perfect the lien on the property if you are still part owner of the property. This would only come into play if the home equity lender wanted to foreclose. They would have a hard time doing so. They can still ruin your son’s credit however. I am surprised that they did not check the ownership of the property, that is one of the most important things done during the process.
The new lender has what is called an unperfected lien and that can leave them in a very bad situation. Pretty much unsecured.
P.S: I am not a residential lender, the above are educated guesses from my 7 years in banking. Please read my disclaimer
I noticed that you posted the same topic twice, so don’t worry I have deleted one of them