Can a mortgage company foreclose in this situation?

[Mike355F1]

Pennsylvania
Hello, 10 years ago my mother was dying of cancer. She wanted to sell my brother her house for what was owed on it. She transfered the deed in to his name at the county. He was unable to get a mortgage in his name due to lack of credit. He therefore just continued paying her mortgage for the past 9.5 years since she died. Last week he had a water pipe burst and flood the house. The insurance company issued a check out to him and my mothers mortgage company. The mortgage company is refusing to sign off on the check since the mortgage is not in his name even though they have record that he has been paying it all these years and the insurance and deed are in his name. Since they are being such jerks we wanted to know what if any obligation does he have to pay on the remainder of the mortgage since the deed is already in his name? Can they foreclose on the house even though the debt is my mother's but the deed is only in my brothers name? Thanks!

 

[HRZ]

Odds are lenders interest is time sequence recorded ahead of brothers deed and is superior to his interest.

What does lender need to release funds ? OFten the lender wants to be sure the work is done and not merely that funds are pocketed and their secure position is less...but my crystal ball is on holiday. MIght be that work needs to be completed first?

 

[quincy]

Pennsylvania
Hello, 10 years ago my mother was dying of cancer. She wanted to sell my brother her house for what was owed on it. She transfered the deed in to his name at the county. He was unable to get a mortgage in his name due to lack of credit. He therefore just continued paying her mortgage for the past 9.5 years since she died. Last week he had a water pipe burst and flood the house. The insurance company issued a check out to him and my mothers mortgage company. The mortgage company is refusing to sign off on the check since the mortgage is not in his name even though they have record that he has been paying it all these years and the insurance and deed are in his name. Since they are being such jerks we wanted to know what if any obligation does he have to pay on the remainder of the mortgage since the deed is already in his name? Can they foreclose on the house even though the debt is my mother's but the deed is only in my brothers name? Thanks!

No. The mortgage company cannot foreclose on the home, based on what you have said here.

The Garn-St Germaine Depository Institutions Act of 1982 allows for a relative who inherits a mortgaged home to take over the mortgage payments.

To read the entire Act, here is a link: https://www.fdic.gov/regulations/laws/rules/8000-4100.html

 

[HRZ]

Be careful...if he stops paying they sure might foreclose ....and if the nature of the damage is such that home is not fit for habitation or uninsurable that could trigger mortgage due ...

 

[HighwayMan]

The Garn-St Germaine Depository Institutions Act of 1982 allows for a relative who inherits a mortgaged home to take over the mortgage payments.

But DID he actually inherit it?

It seems as though the mother transferred the deed prior to her death. The mother passed away and it would seem that no one notified the bank. We don't even know how the estate was handled. It could be a total mess.

 

[quincy]

But DID he actually inherit it?

It seems as though the mother transferred the deed prior to her death. The mother passed away and it would seem that no one notified the bank. We don't even know how the estate was handled. It could be a total mess.

The brother's name is on the deed and the brother (apparently) lives in the house and the brother has continued to pay on the mortgage. The bank did not have to be notified of the mother's death.

The lender cannot foreclose based on what has been said.

If we throw in other facts that Mike did not feel important enough to disclose in his original post, sure. The answer could change but, BASED ON WHAT HAS BEEN SAID and without inventing facts, the bank cannot foreclose.

 

[reenzz]

Op actually asked if the lender can foreclose if the brother stops paying his mothers mortgage.

The answer is yes, the lender can foreclose.

 

[quincy]

Op actually asked if the lender can foreclose if the brother stops paying his mothers mortgage.

The answer is yes, the lender can foreclose.

Oh. Oops. You are right.

Failure to make mortgage payments can result in foreclosure and that WAS the question asked, wasn't it?

I don't know what question I was answering.

Mike, for your brother to avoid the possibility of foreclosure he must continue to make the mortgage payments.

Well, I am off for a caffeinated beverage now ... and I apologize to Mike.

 

[Mike355F1]

Thanks for the feedback everyone. He has a call scheduled today with a supervisor to try to figure things out. He really just wants to get the house repaired but is very aggravated that they have been ok with him paying on the mortgage all these years but will not release the check for repairs.

 

[quincy]

Thanks for the feedback everyone. He has a call scheduled today with a supervisor to try to figure things out. He really just wants to get the house repaired but is very aggravated that they have been ok with him paying on the mortgage all these years but will not release the check for repairs.

First, I apologize again for heading off in the wrong direction earlier.

If your brother continues to pay on the mortgage, the mortgage company cannot foreclose simply because your brother has taken over payments for your mother. But he needs to make payments, even while the repair dispute is being handled.

I do not quite understand the mortgage company's position so I think your brother is smart to try to resolve the issue by contacting a supervisor. It is in the company's best interests to get the house repaired quickly.

Good luck.

 

[Zigner]

Interestingly, the transfer 10 years ago could invoke a "due on sale" clause. This matter may have opened a can of worms that the OP doesn't want opened.

 

[quincy]

Interestingly, the transfer 10 years ago could invoke a "due on sale" clause. This matter may have opened a can of worms that the OP doesn't want opened.

I don't think the due on sale clause would be a problem here. It was not a sale but a transfer. Read the Act I cited.