Life estate deed and second mortgage

[pastorbum]

What is the name of your state?
We live in Maryland.
My wife and I made a life estate deed with revocable powers
two years ago with our children on the deed. Now the bank
is requiring our children to sign for a second mortgage to make
some renovations. Since it is spelled out in the deed that my
wife and I have all powers to mortgage, lein, sell, etc., is it
legal for the bank to require them to sign?

 

[BelizeBreeze]

It sure is. Just because your contract between you and your children stipulates that you are to be responsible for the payment of the mortgage does not absolve the Owners of record (the children).

The bank is well within their rights.

 

[Ciarraine]

Think of it this way: You may be the responsible party for the new debt, but who's the responsible party for the collateral? The people who own it, all of the people who own it--which includes your kids. So yes, your children need to sign the Deed of Trust (and the 1003, notice of right to cancel, HUD-1 and other documents relating to the right of the bank to foreclose if they're not repaid.)