My father owns a home in Nevada, which he bought in 2004. In 2005 he gave the home to my sister(his daughter) as a gift. They signed paperwork transferring the title deed into her name, because she couldn't qualify for the home with her bad credit. My question is: As of this month my sister can no longer afford the monthly payment on the home and told my father she is going to foreclose on the home. Will this effect my father in any way? Like his credit? The housing market has gone way down in Nevada and there is a 3 year pre payment penalty on the home. So selling the home will have a hefty pre payment penalty on it. If the foreclosure happens will it effect my father, who is the original loan owner, or will it effect my sister who had the title deed transfered into her name legally?
Also, if anyone has any suggestions about what else he can do, that would be great.
Thank you all for taking the time to assist me with this.
Regards,
Rudy
2007-07-15 16:09:55 · 4 answers · asked by rudolph_barton 2 in Business & Finance ➔ Renting & Real Estate
yes, a foreclosure will hurt your father's credit rating.
the deed transfer was also probably done in violation of the mortgage agreement your father had with his lender. Not something they normally go looking for, but still not a good thing to have done.
Best course of action is to fix up the house as best she can and sell it. the lien on the home from the father's loan will have to be satisfied at closing and that is when the bank will get it's prepayment penalty. She might try having her father call the bank and let them know he is struggling to make payments and will sell on his own if they waive the prepayment penalty. Banks don't do very well selling houses, so they might go for that deal.
2007-07-15 16:16:56 · answer #1 · answered by John M 7 · 1⤊ 0⤋
The HOUSE is in her name, and from what I understand, you are saying the MORTGAGE is in your father's name. If this is the case, then he will have to pay or he will suffer the penalties of the foreclosure. It doesn't matter who's name is on the deed, it's the name on the loan that counts.
2007-07-15 16:25:48 · answer #2 · answered by lexus 4 · 1⤊ 0⤋
If your father managed to deed the house to your sister without refinancing the mortgage in HER name, he's on the hook 100%. The person who originally takes out the mortgage bears financial responsibility for its repayment obligations.
If your sister will do so, it is best for your father to take back title and pay the mortgage arrears.
2007-07-15 16:19:38 · answer #3 · answered by acermill 7 · 1⤊ 0⤋
If it is now legelly in her name it will affect her but if your Dad is still on this Deed as well they could come after him.Good Luck
2007-07-15 16:15:57 · answer #4 · answered by sugarbdp1 6 · 0⤊ 1⤋