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Home > Archive > Mortgage Discussion > June 2005 > Home purchase
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| hello 2005-06-17, 11:27 pm |
| Hi, I have a simple question about home sales. I was just
kind of wondering if my sister (whom I love, but isn't always
truthful with me) actually bought her own home back in 1982.
I remember when she sold it roughly 5 years later, she required
the signature of my parents. That's all I know, and I only know
that because I saw her putting up a fuss trying to get my parents
to sign--which they did after just a tiny fuss lasting maybe
only 5 minutes.
This all happened in St. Louis, Missouri back in the '80's.
Many years later when I asked my sister about it, she said our
parents' signature was required before she could sell the home
because our parents were co-signors on the mortgage.
This sounded reasonable to me for quite a few years, but
now as I re-think the matter, I'm beginning to wonder if my
sister's name was actually on the home's title or, instead, if it
was my parents' names on the title.
If my sister was indeed the the owner (meaning her name
was on the home's title), would she really require our parents'
signatures to sell the home, even if our parents were co-signors?
Just kind of wondering.
Well, many thanks for any answers.
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| Jeff Strickland 2005-06-17, 11:27 pm |
| If your parents co-signed or were listed as co-borrowers on the note, they
could be listed as Joint Tenants on the title. This would mean that they
would most certainly participate in any sale of the property.
Their interest in the property would have been to become a survivor in the
event of your sister's death. Let's say your folks were co-borrowers on the
note for your sister's house. This would happen if your sister was able to
make the payments but didn't have the necessary funds for a down payment.
So, the years grind on, and your sister gets into a horrible traffic
accident and is killed. If she had no will when that happened, then your
parents would be out of luck and out of the investment dollars unless they
were listed as having a vesting in the title to the property. This vesting
would probably have been a joint tenant. The benefit of joint tenancy is
that the property passes automatically from any vested participant to the
other vested participant upon the death of one. Your parents would want to
gain possession of the property if your sister died while they had their
money buried in the house.
The trouble with a joint tenancy is that the property can not be sold or
refinanced without the participation of all of the vested parties. In your
sister's case, the property could have gained value through normal
appreciation, and she could have refinanced the house with your parent's
participation, even if their participation was only to sign documents that
took them off of the vesting. Then, your sister could have turned around
later and sold the property without further participation of your parents.
It appears that your folks helped your sister with the down payment
(co-borrowers) or they helped with their credit status (co-signer), or a
combination of both (which would leave them as a co-borrower in all
likelihood) that made them some sort of participant in the loan, and
therefore a vested interest in the property. In this case, you sister could
not sell the property without dragging your folks into the process.
You didn't say what the arguing was about, but it could have been that your
parents wanted to keep the property because it was going up in value. On the
other hand, they could have been driving the sale because your sister was
falling behind in the payments and your folks didn't want to carry the
mortgage or get dinged on their credit because your sister was not carrying
her weight. Since this could go either way, you probably don't want to
confront your sister because you could start a family war that all would
rather not be started.
The simple answer is that it is easy to see how your folks could have been
brought in to sign documents used to sell the property. The devil lays in
the details though, and I suggest you not dig too deeply.
"hello" <hello@no-spam-please.com> wrote in message
news:115lfscfh9auja1@corp.supernews.com...
quote:
> Hi, I have a simple question about home sales. I was just
> kind of wondering if my sister (whom I love, but isn't always
> truthful with me) actually bought her own home back in 1982.
>
> I remember when she sold it roughly 5 years later, she required
> the signature of my parents. That's all I know, and I only know
> that because I saw her putting up a fuss trying to get my parents
> to sign--which they did after just a tiny fuss lasting maybe
> only 5 minutes.
>
> This all happened in St. Louis, Missouri back in the '80's.
> Many years later when I asked my sister about it, she said our
> parents' signature was required before she could sell the home
> because our parents were co-signors on the mortgage.
>
> This sounded reasonable to me for quite a few years, but
> now as I re-think the matter, I'm beginning to wonder if my
> sister's name was actually on the home's title or, instead, if it
> was my parents' names on the title.
>
> If my sister was indeed the the owner (meaning her name
> was on the home's title), would she really require our parents'
> signatures to sell the home, even if our parents were co-signors?
>
> Just kind of wondering.
>
> Well, many thanks for any answers.
| |
| hello 2005-06-17, 11:27 pm |
| Thank you for your kind help. You're right, it's best for me not
to dig too deeply lest I step on toes. That's why I posted my
question to a newsgroup rather than ask family members.
I do know, however, that my parents did NOT want to sign because
they did NOT want to sell.
Yet, they signed because that's what my sister wanted--chuckle :-)
I don't think my parents were Joint Tenants with Right of Survivorship
because my sister bought her first house after she married her
first husband. She later sold after they divorced and my sister was
about to marry her second hubby (or perhaps she was already married
for a very short time to hubby Number Two--can't recall).
Anyhow, she and Hubby Two bought their own house for which I
know my parents played no part in. Hubby Two was very
financially responsible and capable.
| |
| Jeff Strickland 2005-06-17, 11:27 pm |
|
"hello" <hello@no-spam-please.com> wrote in message
news:115ln0pmdnbqu11@corp.supernews.com...
quote:
> Thank you for your kind help. You're right, it's best for me not
> to dig too deeply lest I step on toes. That's why I posted my
> question to a newsgroup rather than ask family members.
>
> I do know, however, that my parents did NOT want to sign because
> they did NOT want to sell.
>
> Yet, they signed because that's what my sister wanted--chuckle :-)
>
> I don't think my parents were Joint Tenants with Right of Survivorship
> because my sister bought her first house after she married her
> first husband. She later sold after they divorced and my sister was
> about to marry her second hubby (or perhaps she was already married
> for a very short time to hubby Number Two--can't recall).
>
Joint Tenants with Right of Survivorship is redundant. The right of
survivorship is the main feature of joint tenancy. I like to say that it
passes property from one vested interest to another, but that is not
entirely accurate. It does this, but not how one might imagine given the
sentence structure. When two or more people hold title as joint tenanta,
then if one or the other passes, the survivor gets the property. Of course
the bank is going to want the payments to continue ...
quote:
> Anyhow, she and Hubby Two bought their own house for which I
> know my parents played no part in. Hubby Two was very
> financially responsible and capable.
Then it sounds tome like your folks would have liked to keep the property
and convert it to income property, but your sister didn't want to do that.
We can't tell from here if your folks got their initial investment back from
your sister, but we should assume that they did. Let's say the property was
originally purchased for 150,000, and your folks put up 20%, or $30,000.
After several years, the property sold for $200,000. Your parents should
reasonably get their initial investment back, plus 33% of the appreciation.
The property sold for a gain of 50,000, so your parents should get 30,000
plus 33% of the $50,000 in appreciation. I assume that your folks would go
at this in the same manner as millions of other parents, and be happy to get
the 30k back, and let yoru sister take the appreciation.
| |
| hello 2005-06-17, 11:27 pm |
| Well, thank you again for your insights. You're very right--it's
best for me not to be too nosy about this.
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