Expert: Dick Dennis - 7/1/2006

Question
MY HUSBAND IS WANTING TO SELL LAND THAT HE RECIEVED IN A DIVORCE SETTLEMENT.  HE CAN'T GET FULL CLEAR TITLE ON THE LAND BECAUSE OF A PREVIOUS LOAN USING PART OF HIS LAND AS COLLATERAL.  THE LOAN IS IN HIS EX-WIFES NAME ONLY (SHE HAD HIS NAME REMOVED FROM THE LOAN AND IN THE MEAN TIME THE LENDER SOLD THE LOAN TO ANOTHER BANK.) SHE WAS AWARDED THE HOME AND PARTIAL ACREAGE BY THE DIVORCE AS WELL AS THIS DEPT ON THAT MARITAL HOME.  MY HUSBANDS PROPERTY IS RECORDED AS A SEPERATE PARCAL BUT BUTTS UP AGAINST HER LAND.  SHE IS COMPLETELY UNCOOPERATIVE AND WILL NOT EASILY SIGN ANYTHING.  WE HAVE A BUYER FOR OUR LAND AND WANT TO PURCHASE HER LOAN FROM THE COMPANY THAT HOLDS IT SO THAT WE CAN THEN RELEASE OURSELVES FROM THE TITLE AND STILL PROTECT OURSELVES IN THAT SHE WOULD STILL HAVE TO REPAY THE LOAN TO US.  SHE IS UNWILLING TO SIMPLY SIGN A NEW DEED.  WHAT STEPS CAN WE TAKE TO PURCHASE A LOAN FROM A FINANCIAL INSTITUTION?

Answer
As long as you make a legitimate offer to purchase that note and deed of trust (or mortgage), you should not have any trouble. However, I recommend you hire a real estate attorney to handle the purchase for you, to protect your interests (and perhaps a discount). He/she should know exactly how it all should go down. For example, a letter from an attorney will make the bank from which you want to purchase the loan pay attention faster.

Be aware that the bank will undoubtedly want every dime that is due them. Also, if I am understanding you correctly, once you take her loan off the property what kind of security are you going to have? She could walk away from the responsibility of that loan and force you to sue her so that you can get a judgment. The original idea of that loan was to be secured by that land. What happens if she stops making payments? You would not be able to foreclose on anything, much less the property from which you removed the loan.

I do wish you well.

Dick Dennis           dixiedee13@aol.com

www.OldProblemSolver.com