Need Advice on Property Dispute Between Uncle and Nephew

[Ryan Lupo]

Hey BiggerPockets community,

I hope you're all doing well. I'm here seeking some advice for my uncle who's currently in a tricky situation regarding a property. Here's the backstory:

About five years ago, my cousin was unable to qualify for a loan, so my uncle stepped in and purchased a property using conventional financing on behalf of my cousin. To facilitate this, my cousin paid my uncle the 20% down payment and has been making monthly mortgage payments ever since. However, it's essential to note that the house is solely in my uncle's name, and their agreement is purely verbal with no written documentation.

Recently, the relationship between my uncle and cousin has soured. My uncle is getting older and facing health issues. On the other hand, my cousin now wants power of attorney over the property, claiming that he wants to take charge of paying the mortgage company directly. This proposition is causing significant stress for my uncle, who now regrets helping his nephew and wishes to extricate himself from the arrangement altogether.

My question for the BiggerPockets community is: What are some potential solutions that could benefit both parties involved?

Selling the property, which seems like the most straightforward choice, would likely completely strain their relationship. Additionally, the nephew is still unable to secure a mortgage in his name due to not meeting the qualifications. Moreover, the house was initially financed at a favorable 3% interest rate, whereas current rates are nearly double at 7%, making this option also detrimental to their relationship.

It's clear that this situation is complex and emotionally charged. We're looking for solution that respects both parties' interests and preserves their family ties as much as possible. I'd greatly appreciate any insights, suggestions, or similar experiences that the BiggerPockets community can share. Thanks in advance!