Mercy Refi

[dupre]

What is the name of your state (only U.S. law)? California

I have a friend who was late on their mortgage and was locked in an interest only loan that was about to reset to a payment with an increase of about 1000. he asked me to refinance the house in my name lock him in a regular payment and take some money out.. his credit was crap and did not want to lose the house because, according to him, he wanted to raise his kids in the same house. i was very reluctant to do this because this friend has a long history of shady financial dealings. Late payments, not paying bills, etc. i did under the condition of him giving me 10k and him getting his financial house in order and after 3 years of building credit to then get the house back in his name. its been 10 years now and he still has crap credit and i still have the house in my name. my question is...who owns the house? when i refinanced the loan is my name and the title is in my name. can i sell the house and be done with this? when i go and apply for a loan this house shows up as a liabilty. debt to income ratio stuff...i need this anchor gone....

 

[adjusterjack]

You're going to have to evict him before you can sell. If you try to sell with him in it you'll be limited to investors who want a rental and when they find out that your friend has been living rent free for 10 years like he owned the place, they will offer you a pittance as a distressed property.

You can treat him as a tenant, and his payments to you as rent, and give him 60 days written notice that his tenancy is terminated and he has to be moved out by the deadline or you'll evict him through the courts.

Trouble is, if he puts up a fight and gets a lawyer he could claim that you only own the house as a "constructive trust" for him, especially with the $10,000 payment he gave you.

Bottom line: You both committed mortgage fraud and, while you aren't going to jail for it, no judge will be sympathetic to the problem you are having now.

The judge may very well tell you to finish paying off the house for another 20 years and sign it over to him.

 

[dupre]

You're going to have to evict him before you can sell. If you try to sell with him in it you'll be limited to investors who want a rental and when they find out that your friend has been living rent free for 10 years like he owned the place, they will offer you a pittance as a distressed property.

You can treat him as a tenant, and his payments to you as rent, and give him 60 days written notice that his tenancy is terminated and he has to be moved out by the deadline or you'll evict him through the courts.

Trouble is, if he puts up a fight and gets a lawyer he could claim that you only own the house as a "constructive trust" for him, especially with the $10,000 payment he gave you.

Bottom line: You both committed mortgage fraud and, while you aren't going to jail for it, no judge will be sympathetic to the problem you are having now.

The judge may very well tell you to finish paying off the house for another 20 years and sign it over to him.

Doesn't make sense.... Pay the mortgage and sign it over to another party.... Sounds like slavery...

 

[Ohiogal]

Doesn't make sense.... Pay the mortgage and sign it over to another party.... Sounds like slavery...

Google unclean hands.

 

[LdiJ]

You're going to have to evict him before you can sell. If you try to sell with him in it you'll be limited to investors who want a rental and when they find out that your friend has been living rent free for 10 years like he owned the place, they will offer you a pittance as a distressed property.

You can treat him as a tenant, and his payments to you as rent, and give him 60 days written notice that his tenancy is terminated and he has to be moved out by the deadline or you'll evict him through the courts.

Trouble is, if he puts up a fight and gets a lawyer he could claim that you only own the house as a "constructive trust" for him, especially with the $10,000 payment he gave you.

Bottom line: You both committed mortgage fraud and, while you aren't going to jail for it, no judge will be sympathetic to the problem you are having now.

The judge may very well tell you to finish paying off the house for another 20 years and sign it over to him.

Actually, I think that the judge might treat it as a contract sale, with the OP as the mortgage company. That 10k payment would sure look like a down payment to most people. Therefore, unless the OP has a valid reason to foreclose (IE payments not being made) then he would have to right to evict at all.

However, in any of those scenarios (yours or mine) there is a big problem where the OP's taxes are concerned...because it does not sound like the OP has reported either an installment sale with a 10k down payment or rental income and expenses.

 

[adjusterjack]

Any way you look at it OP is good and screwed for making an incredibly bad decision.

 

[dupre]

Actually, I think that the judge might treat it as a contract sale, with the OP as the mortgage company. That 10k payment would sure look like a down payment to most people. Therefore, unless the OP has a valid reason to foreclose (IE payments not being made) then he would have to right to evict at all.

However, in any of those scenarios (yours or mine) there is a big problem where the OP's taxes are concerned...because it does not sound like the OP has reported either an installment sale with a 10k down payment or rental income and expenses.

What is an op?

 

[LdiJ]

What is an op?

OP = Original Poster.

 

[dupre]

Actually, I think that the judge might treat it as a contract sale, with the OP as the mortgage company. That 10k payment would sure look like a down payment to most people. Therefore, unless the OP has a valid reason to foreclose (IE payments not being made) then he would have to right to evict at all.

However, in any of those scenarios (yours or mine) there is a big problem where the OP's taxes are concerned...because it does not sound like the OP has reported either an installment sale with a 10k down payment or rental income and expenses.

all rental income has been reported as income from day one.....