Home equity loan, place falling apart

[SuzieMayI]

Michigan
Friend owns a mobile home in a subdivision zoned for mobiles. It is literally falling apart, partial roof cave in, siding keeps popping loose, floor sagging in places. Hes not living there now.
Also the subdivision was supposed to have water access to a small lake. But someone decided to make that available to "paid association members" only, reducing the value of the lot.
So he owes about $17K on it. The mobile needs to be demolished. He would like to give the property away, but no one would want it with the debt attached.
Is there a way to separate the debt from the property? And no, he doesnt have good credit.
Suggestions?

 

[LdiJ]

Michigan
Friend owns a mobile home in a subdivision zoned for mobiles. It is literally falling apart, partial roof cave in, siding keeps popping loose, floor sagging in places. Hes not living there now.
Also the subdivision was supposed to have water access to a small lake. But someone decided to make that available to "paid association members" only, reducing the value of the lot.
So he owes about $17K on it. The mobile needs to be demolished. He would like to give the property away, but no one would want it with the debt attached.
Is there a way to separate the debt from the property? And no, he doesnt have good credit.
Suggestions?

Does he own the land?...or does he just lease the land? Is his lot part of the paid association and he just hasn't paid his dues or is he not a member of the association at all?

Its possible that allowing the land/home to go into foreclosure might be his only option, but he might have other options depending on the answers to the above questions.

 

[SuzieMayI]

Yes

Yes, he owns the land. The "association" was formed after he purchased the property, in apparently in violation of the deed. Initially there were no association dues.

 

[justalayman]

Yes, he owns the land. The "association" was formed after he purchased the property, in apparently in violation of the deed. Initially there were no association dues.

if there were provisions in his deed that the land he purchased is part of an HOA, whether there be an active HOA at the moment or not, he can be required to belong to the HOA, pay dues, and comply with HOA rules.

If there were no provisions in the deed requiring the land be a part of an HOA he cannot be forced to be a member. If he has legal provisions in his deed he has access to the water, then he has legal access to the water.


Has the home been legally attached to the land, as in has title to the mobile home been retired to the state and the home become a permanent structure on the land OR is the home still considered a mobile home where it is a legally seperate entity from the land?

What is his goal?

He can still be held liable for any remaining balance if the note is foreclosed but the auction price does not cover the balance owed. Given your statements about the building and property it sounds like there is a net worth of about $0.


If he simply does not pay the taxes on the land the state will take possession of it.

 

[LdiJ]

if there were provisions in his deed that the land he purchased is part of an HOA, whether there be an active HOA at the moment or not, he can be required to belong to the HOA, pay dues, and comply with HOA rules.

If there were no provisions in the deed requiring the land be a part of an HOA he cannot be forced to be a member. If he has legal provisions in his deed he has access to the water, then he has legal access to the water.


Has the home been legally attached to the land, as in has title to the mobile home been retired to the state and the home become a permanent structure on the land OR is the home still considered a mobile home where it is a legally seperate entity from the land?

What is his goal?

He can still be held liable for any remaining balance if the note is foreclosed but the auction price does not cover the balance owed. Given your statements about the building and property it sounds like there is a net worth of about $0.


If he simply does not pay the taxes on the land the state will take possession of it.

I agree that the home itself is probably worth zero, but the land itself may have some value if the mobile home can be torn down and removed from the land.

Depending on where its located the land itself could be worth a relatively small amount, or could be worth a decent chunk of money. It certainly would be easier to sell the land without the mobile home on it.

 

[SuzieMayI]

Ideally, he could pay to have the mobile dismantled. But thats not going to happen, he's 70 yrs old, broke...
He could give it away to someone who would be able to remove the mobile, then they'd have a lot to put something on. But, he can't do that because of the loan.
If they would separate the loan from the property then he could give it away.
But I suppose they wont ever do that.