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Baby Corner Message Board > Parent to Parent > Coupons, Savings & Money Matters Does anyone know who is responsible?



Does anyone know who is responsible?

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Old 07-20-10, 10:21 AM
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Default Does anyone know who is responsible?

On my mother's house, the primary mortgage loan is in her name only. She has a home equity line of credit, which is in her name and my husband cosigned on it.

When the house is sold, if she is still alive, say she doesn't end up getting enough money to cover both mortgages, and she doesn't have the money to cover the difference. Can they come after my husband for the money?

What if she passes away, and we sell it, and don't get enough money to cover both mortgages? Can the bank come after my husband if there isn't enough money in my mother's estate to cover the difference?
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Old 07-20-10, 10:22 AM
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Oh, and I dont know if this makes a difference, but the hosue itself is in my name with a life estate.
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Old 07-20-10, 10:51 AM
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I am pretty sure they can only go after him for the HELOC as he is a "borrower" on that loan and partly financially responsible. If it came down to it, he could due a modification to work out a payment plan.

On the main mortgage, you or whomever your mom decides on, should sign a power of attorney or executor of the estate so they know who to contact regarding payments and escrow information in the event of her passing. That will also allow you to speak to the lender on her behalf and go through a modification for that loan OR also refinance what it left of it and the HELOC loan into something more doable for you. (with your husband, since he signed on the HELOC loan)

And I think if she sells the home, she would have the pay the 1st mortgage first, so all that would be left is the HELOC. (aka the 2nd lien)

But I haven't worked for a mortgage company in over 2 years and my brain has filed away a lot of that knowledge in the "don't use it, so I lose it" room, so you mom can always speak to someone at her lender to get the low down on how all this would work.

Last edited by MrsS1stbaby; 07-20-10 at 11:57 AM. Reason: major typo!
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Old 07-20-10, 11:01 AM
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In short, yes--in the event that your mother is unable to repay the HELOC (for whatever reason), your husband is responsible. That's why a co-signer is sometimes required.

Now, as stated above, there are lots of legal hoops you'd have to jump through to get it all settled. But your husband wouldn't be responsible for the first mortgage, just the HELOC.

In the event of her death, you'd presumably sell the house. The profits would be used to pay off the first mortgage and then the remainder would go to the HELOC. The HELOC would need to be refinanced or worked out in modification in your husband's name alone in order to declare the house free of liens to sell. But yes, if the first mortgage is paid off and the remainder doesn't cover the entire HELOC balance, your husband is responsible for the difference.

Is your mother considering selling?
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3Princes (07-20-10)
 
Old 07-20-10, 11:07 AM
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I already have financial power of attorney (and for healthcare too actually). Blah. This sucks.

My mother is considering selling, I guess.

What she really wants to do is stick us with the HELOC 100%. If she sold the house I think she would try to pay off her mortgage and make us pay the HELOC.
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