Expert: Karyn Foley - 7/29/2009

Question
Hi Karyn,
We had recently short sold our house and am still waiting for it to be approved by our bank.  My in-laws have decided to buy us a house (phew~).  
My question is:  Can we put our name on the title (with their approval, of course) or will we not be able to because of the short sale?  Also, my in laws are paying with cash so their will be no mortgage loan on the house they're buying for us.
Thanks

Answer
Dear Alisa: Are you in-laws willing to put your names on the title?  This could be an issue with them, so I hope that they have asked advice of their lawyer and/or accountant.  If the purchase is totally one hundred percent cash, then there is no lender involved and that is good because of there was a lender they probably would not approve a loan because your credit has been compromised by the short sale of your own home.  If there is a problem with the sellers of the new home, your in-laws could purchase it, record the deed, then do a quit claim and put your names on the title.  I hope all parties are getting full information on the ramifications of four owners and their obligations and responsibilities to one another.  That is something everyone should consider.  Again, your accountant and lawyer can give you that direction.  All of the owners would be responsible for the taxes, so there should be an agreement among all parties as to who does what, but the person or persons who own the home owe the taxes.  I think you are very fortunate, as I would never hand over something of that much value to people who would let their first home go under.  If you have problems again, their credit could be impacted if taxes are not paid or insurance not paid.  Quite frankly, not to be disrespectful, I think you owe them the respect to tell them to seek professional advice before they do this very generous but perhaps unwise move.  Sorry, I do not mean to insult you, but a lot of money is at stake and you are a risk.  Since I cannot "practice law without a license" an attorney is the one to next contact and ask questions - and so should they!  Kayrn Foley