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Updated almost 4 years ago on . Most recent reply

Loan Mod, Pre-Foreclosure, Probate and Possible TItle Issues
Her'es the skinny:
Step-mother and Step-Daughter bought the house, and got the mortgage together.
A few years ago, set-daughter's name was removed from the deed, but remained on the mortgage.
Step-mother had a few loan mods, then went into default and stayed there for 2 years.
Step-mother passed away in April, left a will leaving everything to step-daughter. (* I have seen the will and this is accurate.)
I saw the last letter from the mortgage company yesterday and she is $24K in arrears and the total owed on the mortgage (with the back payments) is $50K.
I estimate the house to need approximately $20,000 in rehab costs.
There's obviously money to be made in this deal, but...
I haven't done an estate deal with a will involved in over 15 years and I can't recall how I would write this contract as the step-daughter, at this precise moment, has no legal right to enter into a contract for sale as she is not listed on the deed as an 'owner.'
Does anyone have any guidance for me on how I should write this contract up?
Thanks in advance for your help.
Vanesssa
Most Popular Reply

Hi @Vanessa Blais, and congrats on finding an interesting potential deal!
You don't specify the ARV or the loan payments, so it's unclear whether this is actually a viable deal, but as long as it is and the seller is willing, I see no reason to delay.
I would make certain the probate process has been initiated and the will has been submitted to court. Then I'd get the step-daughter to sign a purchase & sale agreement. I'd be looking to purchase subject to the existing mortgage, so I'd have the step-daughter (who's still on the loan) request another loan modification. I might add a special stipulation acknowledging that the step-daughter must secure title by a date certain, or else the agreement is void.
Lastly, I would protect my interest by recording an affidavit of agreement with the county clerk, cross-referenced to the warranty deed.