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Company Loan Type APR Est. Pmt.

"Pretend Mortgage"

Posted on: 10th Jun, 2010 06:16 am
My story is a bit different from the norm.

In 2002 I gave my daughter (then age17) a small house in SC . It had no mortgage on it at the time.

In 2003 she (my daughter ) began to act like a teenager. "My friend" who is a real estate broker, suggested that we put a pretend mortgage the home with my friend being the mortgage holder, to protect the property (so she could not sell it)

She had a mortgage drawn up with no payments just a balloon payment in 2018 for close to three times the value of the property.

In 2005 "my friend" and I had a falling out. We have not spoken since.

No insurance has been on the house and taxes became delinquent.

We just received a letter from her saying she wants to call in the loan There was no paper work other than the mortgage.

Can my daughter get out of the "pretend mortgage"

What a mess!!

Thank you for any help.
Hi trishcimh!

Welcome to forums!

I must say that you are in a tough situation. If there is a formal paperwork regarding the mortgage, then she can make your daughter liable for the payments and can even foreclose the property. In my opinion, you should immediately get in touch with an attorney and take his opinion in this matter.

Feel free to ask if you've further queries.

Sussane
Posted on: 10th Jun, 2010 11:47 pm
Thank you Sussane,I have found this to be true however would'nt she also be liable. In other words no money changed hands so would "total failure of
consideration" be a defence? Or could my daughter actually sue her ? I know I will need an attorney for sure, but I am doing a crash course on Contract Law. An old friend once (the same friend) told me knowledge is power!! I need to understand this for myself if I loose this house ...well I can not loose house.


Thank you
Trish
Posted on: 11th Jun, 2010 04:48 am
Welcome trish,

If there is a formal document stating about the loan, it would be difficult for you to prove that no money was exchanged. As Sussane has suggested, get in touch with an attorney and he or she will be able to help you in a better manner.
Posted on: 13th Jun, 2010 10:52 pm
hi Andoris, yes it is a "formal document stating about the loan" But wouldn't she have to prove that she did give the money? I did talk with an attorney and he said say because of "total failure of consideration" it would be void? As I said I am doing a crash course on contract law and from what I am getting she has more to worry about then my daughter. Her being a Real Estate Broker also should put a wrinkle on her side. Any suggestions will be appreciated.

Thank you
Trish
Posted on: 14th Jun, 2010 10:30 am
Hi Guest!

Welcome to forums!

It is true that the lender will have to prove that she had given the money to your daughter. It is good that you had contacted an attorney in this regard. He will be the best person to help you in dealing with her.

Feel free to ask if you've further queries.

Sussane
Posted on: 14th Jun, 2010 10:19 pm
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