Mom hasn't paid the mortgage in 8 years

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Mom hasn't paid the mortgage in 8 years

Chris Carbone
Vendor · Tyngsboro, MA · Member since 2017 · 5 posts · 0 votes

Hello Bigger Pockets members,

I recently found out my mom hasn't paid the mortgage since 2009.  She said she was having problems, but never just how deep.  The house was bought in the early 90s for 175,000 and she owes something around 250,000 now, maybe more.  The house is probably worth 350,000, but she can't find the information from the bank.

She wants to get rid of the headache and it seems like a good investment if I were to flip it or sell it.  It needs a lot of work, but I'm a plumber and can do most of the work.

What are some recommended steps?  Can she sell the house to me?  Can she put the house in my name?  Should I just start paying the mortgage for her and if so how do I get my name on it?  She believes she won't make any money from the bank in a sale because of how much she owes, but this doesn't seem like it should be a total loss.

Best Regards, 

Chris Carbone 

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
9y

First, you to know Exactly how much she owes.  She should be receiving mailed statements, or maybe you/she can find out thru the lender's online system, maybe not.  I believe MA is a judicial foreclosure state.....if so you'd have plenty of time even you you woke up the lender.  If there is a spread to be made, just fix it up and sell it....she could pay you back for your costs afterwards.  Please don't tell me you're trying to take any away any "profit" from your Mother.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    9y

    First, you to know Exactly how much she owes.  She should be receiving mailed statements, or maybe you/she can find out thru the lender's online system, maybe not.  I believe MA is a judicial foreclosure state.....if so you'd have plenty of time even you you woke up the lender.  If there is a spread to be made, just fix it up and sell it....she could pay you back for your costs afterwards.  Please don't tell me you're trying to take any away any "profit" from your Mother.

    2Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    9y

    @Chris Carbone

    Welcome to BP. I'm in the same boat with @Account Closed. Something does not add up here. 

    While its possible for a Mortgage to slip through the cracks due to a service forgetting about it, that's about as likely as winning the lottery. 

    Step 1: If your mom really hasn't paid the mortgage since '09 and doesn't have the paperwork you'll need to find out who owns the note. You can do that through the county registrar of deeds. I grew up in MA, Essex County, and I think Tyngsboro is in Suffolk County, but I'm not sure. 

    If you want to PM the address I can help you look it up. 

    Once you know who owns the mortgage and how much it is for you can start looking for papers from that bank. You'll need to know how much your mom owns. That will determine even if you can flip the home or if you'll need to try something else.

    2Reply
  • Christopher Price
    Rental Property Investor · Hampton, VA · Member since 2016 · 18 posts · 9 votes
    9y

    Hey Chris,

    My first question would be to confirm that the house is not paid off.  If she bought the home, say 1993, with a 15 year mortgage she could have paid it off and simply forgot.  Alternatively it seems that it might be possible your mom took out a reverse mortgage, this may explain why she owes more then what she bought it for, but still less then the value of the home.  I might start with the local assessor's office and do a title search.  If the bank does own it, they may be sitting on it until the housing market in your area picks up.  They may not realize she is living there.

    Additionally , depending on the circumstances you may want to check your local laws on adverse possession.

    2Reply
  • Chris Carbone
    OP
    Vendor · Tyngsboro, MA · Member since 2017 · 5 posts · 0 votes
    9y

    She's worried about not having a place to live and doesn't want to be a burden on her kids so she chose to ignore it and that's why it's becomee out of hand.  

    Things may not really be the way she says, but she's never been open to me about finances so I'm sure there are a lot of details she's not giving up.

    I do believe that she hasn't made payments because she's on disability and could not possibly be making the mortgage payments on her own.

    If we were to figure out how much she owes the bank how could we learn it without alerting the bank yet?

    0Reply
  • Chris Carbone
    OP
    Vendor · Tyngsboro, MA · Member since 2017 · 5 posts · 0 votes
    9y

    So I took some advice from you and looked up the deed. She got an ARM in 2002 for 186,000. Now I know who owns the note as well. What are some questions I need answers from my mom on? Obviously how much she still owes. I'd also like to know how it's possible the bank ignored her for so long if what she says is true.

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  • Davido Davido
    Rental Property Investor · Olympia, WA · Member since 2012 · 544 posts · 311 votes
    9y

    Hello Chris,  I highly recommend that you check into the statute of limitations on your Mom's mortgage.   Mortgage's are not always exempt from the statutes of limitations for collecting past due debts.  Through the simple passage of time, she may have accrued a legally recognized defense against future attempts to foreclose.  Here is a link to a Mass. article describing some of the considerations.  

    http://www.nutter.com/trending-newsroom-publications-Statute-of-Limitations-for-Mortgages-Referencing-Maturity-Date-of-Underlying-Debt-04-17-2015

     It may be worth consulting a local attorney.
    2Reply
  • Davido Davido
    Rental Property Investor · Olympia, WA · Member since 2012 · 544 posts · 311 votes
    9y

    PS.  I used to work abandoned properties and found out it is really not that unusual for past due mortgages to go unpaid for years or decades without foreclosure.   Good luck.  Let us know how this situation works out.

    1Reply
  • Brandon Battle
    Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
    9y
    First things first,assess the exact situation.Find out exactly how much money she owes and to whom.You are going to have to eventually make contact with the lender when you ask them for payoff information anyway so you might as well do it now.Be prepared for a shock because they could hit you with years worth of late fees that could total thousands and thousands more than you expected.Then you need to sit down with your mother and figure out the end game.Where is she going to live? How is she going to pay for it till she passes away? Will there be any profit after the sale? Who’s going to get the profit? Has she paid her property taxes? How much is the house worth as is? What is the ARV? Start with that.
    1Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    9y
    Originally posted by @Davido Davido:

    Hello Chris,  I highly recommend that you check into the statute of limitations on your Mom's mortgage.   Mortgage's are not always exempt from the statutes of limitations for collecting past due debts.  Through the simple passage of time, she may have accrued a legally recognized defense against future attempts to foreclose.  Here is a link to a Mass. article describing some of the considerations.  

    http://www.nutter.com/trending-newsroom-publications-Statute-of-Limitations-for-Mortgages-Referencing-Maturity-Date-of-Underlying-Debt-04-17-2015

     It may be worth consulting a local attorney.

    False hope. If she took out an ARM in 2002, the maturity date would be, almost certainly, 2032. SOL would seem to be a non-issue here.

    That said, I agree that the best course of action right now would be to get a local attorney on board... foreclosure defense/bankruptcy type.

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    1Reply
  • Robert Hudson
    Crossville, TN · Member since 2017 · 121 posts · 168 votes
    9y

    She has lived there payment free for 8 years. What is that worth? If this has really fallen thru the cracks she could very well live there for the rest of her life payment free. My advice: let sleeping dogs lie.

    2Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    9y
    Originally posted by @Robert Hudson:

    She has lived there payment free for 8 years. What is that worth? If this has really fallen thru the cracks she could very well live there for the rest of her life payment free. My advice: let sleeping dogs lie.

    Agreed! For now. But there has to be a Plan B already in place for when the beast wakes up. 

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  • Chris Carbone
    OP
    Vendor · Tyngsboro, MA · Member since 2017 · 5 posts · 0 votes
    9y

    Worst comes to worse she can always come live with me and we will figure something out from there.  If she can continue staying there should I avoid the bank as she has been doing?  I'm thinking at this point a lawyer is definitely the best option.

    0Reply
  • Lauren B.
    Asheville, NC · Member since 2017 · 170 posts · 242 votes
    9y
    I was so curious about this I wanted to know WHY and how this could have happened. The relevant docs are available on the register of deeds website. The loan for $186,000 in 2002 was satisfied (paid off) in October 2003. Perhaps she had an inheritance? Someone must be paying the property taxes. Is she in sound mental health?
    0Reply
  • Chris Carbone
    OP
    Vendor · Tyngsboro, MA · Member since 2017 · 5 posts · 0 votes
    9y

    @Lauren Bobloblaw

    Sorry if I made that confusing. She refinanced in 2002 for the ARM. So her original mortgage from 1990 would have been paid, but then she acquired a new one.

    She has undiagnosed bipolar as well as depression, anxiety, and ptsd which is why I'm having difficulty getting these answers from her.  She's not very trusting of anyone. 

    I looked at the registry of deeds for her county and she has a lien of $7,000 from the electric company when the furnace died and she was heating the house by electric space heaters for two years and couldn't pay the bills.  It looks like there is nothing from the town, but im waiting on a definite answer if she had been paying taxes.

    @Mr Davido

    The nutter link you sent me says that if the bank knows the mortgage has not been satisfactory for five years in MA then it looks like the law is in her favor.  If any one else has advice on SOL I'd like to hear it.  

    For now I have some hope and need to speak to a lawyer.  In the meantime I will look up the actual law from the ma.gov website and see if it says the same thing.

    0Reply
  • Lauren B.
    Asheville, NC · Member since 2017 · 170 posts · 242 votes
    9y
    Right. I see both mortgages from 90 were satisfied when she refinanced in 02, but that new note (for $186k) was also satisfied in 03. I'm sorry about your mom. My mom is also bipolar and the paranoia makes it impossible to get legal things accomplished. PM me if you want to talk more in detail about what I found.
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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    9y
    Originally posted by @Lauren B.:

    Right. I see both mortgages from 90 were satisfied when she refinanced in 02, but that new note (for $186k) was also satisfied in 03.

    I'm sorry about your mom. My mom is also bipolar and the paranoia makes it impossible to get legal things accomplished. PM me if you want to talk more in detail about what I found.

    This just went sideways.

    So you're showing the 2002 DoT for $186k recorded in 2002 as released in 2003? And no new mortgage on record?  That was 14 years ago... so why does mom think she stopped paying her mortgage years later?

    Time to gather more facts.

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  • Brett Goldsmith
    Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
    9y

    First step is to get a payoff from the bank to see how much is owed. If the home is in foreclosure you can't just start making payments. 

    0Reply
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