Expert: Dick Dennis - 11/20/2007

Question
QUESTION: My parents helped me purchase a starter home by co-signing on the mortgage.Their names were not on the mortgage but they kept both their names on the title.I continued to make payments and pay taxes on the house for the following 7 years.Throughout that time,i did run into some financial troubles after my wife left me with 4 kids to raise on my own They helped me out by paying my mortgage a few times.Fast forward 3 years i decide to remarry against my parents "wishes" and they decide to make my life a living hell.They take me to court for grandparents visits, which they end up losing and as a result stop talking to me completely....Meanwhile they are still on the title and refuse to sell the property and will only agree to me "buying them out".They were fully aware of my financial situation and know i couldn't afford to do that.Still they refused to sell,refuse to help with the payments,or taxes-(both their names were on the home insurance policy as well) ...to make a long story short-i had to refinance my home to get my x wife off the title after the divorce.The lender informed me that my parents,had to also give their consent since they are co-owners on the property.After not speaking to them for over a year, i had to bite my tongue and ask for their cooperation.My mom then delays making a decision for over 3 weeks-and as a result my credit drops,i get a horrible rate.At this point i am struggling to make ends meet so i take out whatever equity is in the home to catch up on past bills and get my feet back on the ground.Now 6 months later i lose my job due to "downsizing" and end up on unemployement.
Although i have been actively searching for a new job-i still haven't managed to find anything yet.My wife has gotten a part time job and i've done some independent contracting in the meantime.Still we cannot keep up with all of the expenses and the mortgage.i receive a letter from the lender stating the house is in default.I call my parents to discuss what we are going to do with the property now that its in default and my mother tells me its not "their problem anymore" because they are giving me their share of the property as a gift.So in other words,i can have their share now that i'm about to lose the property.....They also own a commercial property and a 2 other homes on their own.
Unless you know my mother you wouldn't understand how vindictive she can be.I know that she is just doing this to "punish" me for not being under her complete control like i have been all my life.Can she get away with this? It almost seems like i have no  choice than to just watch my life crumble around me.Do you see any hope in my situation here?

ANSWER: Some of us learn by going to school, Victor. And some of us learn by life's experiences. When it comes to real estate, Victor, keep this in mind: If it isn't in writing, it was never said. So, anything they may have agreed to verbally anytime in the past (like Louis B Mayer said) isn't worth the paper it was written on. Back when you needed them to help you buy that house, they had you over a barrel. They helped you with funds to help you buy it and they wisely protected their interests they put themselves on title with you. There was no need for them to be on the loan with you. I will bet they never co-signed at all or they cancelled that portion of the transaction and merely put their name on title while helping to fund the deal.

Your only chance, if there is any, for you to save yourself in this mess is to go see a REAL ESTATE attorney. But he/she is going to tell you that without any up-front retainer money, no help can be forwarded to you.

As you probably realize, while you recover from this mess on your and your wife's own, you will disown your parents and you will feel fine about it . . . until it comes time to inherit what they own. If your mother is that vindictive then you'll probably not get a dime out of any of their estate. So get out there and create your own life and disregard those people who used to be your parents. They keep screwing you and you take it. Just walk away from them. Unless the attorney has some input, I don't see how you can survive all this unless you get yourself a good job and start over again.  . . . by the way, where was your father in all this? I do wish you well.

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: First of all i'd like to thank you for your quick response.I do realize that an attorney will ask for some retainer money and unfortunetly i just can't afford that at the moment.You are right about the fact that i will not inherit any of their estate-(she told me if i remarried, i'd be taken off their will)and that's not a problem for me anymore.I've realized living in a peaceful and loving home enviorement is worth alot more than owning half a million dollar's worth of property.However its hard being on my own,and without any financial support from my parents-since its something i've always had....Even when i didn't ask-my parents way of expressing their love for me has always been by throwing money at me,and their form of punishment by taking it away.

My mom enjoys playing these little mind games and tries to convince me she does everything for my "best interest" in mind,even when it ends up hurting me.Like this latest tactic.After not speaking for over a year,all of a "sudden" she decides to give me her share of the property and sign over the title to make me Sole owner of the property...and she gets this burst of generousity two weeks after i lose my job.I guess as long as i payed for everything-it was an investment for them to remain owners but now its not such a good idea anymore to co-own a house thats about to be forclosed.

Honestly,at this point all i want is to get rid of the property.I want to sell it and move as far away from them as possible.I tried explaining to them if we can manage to get the house out of forclosure then sell it,we could all benefit from it,since the development in this area has gone up and my parents are currently trying to sell their other properties.
She refuses to help in any way..My father is just her puppet and will agree with everything my mother says to stay on her side.Speaking to them is virtually impossible.
They are trying to convince you that they are "genuine", while they are masterfully trying to distract you from whatever the "hot topic" was that you brought up that they want to avoid like a hot poker.They are "masters of distraction", "diversion artists". Since the content is so emotionally charged for me, I miss the clues and get caught up in the drama, play-acting, and hand gestures and get led down rabbit trails that lead me far, far away from the original point that they so desperately want me to avoid. My head starts to swirl as i find myself embroiled in the depths of defending myself against some other related or unrelated emotionally charged distraction that has been thrown up as a decoy. I could go around in circles forever until i throw my hands up in exasperation and confusion. Which is exactly where they want me.

Thats what talking to them was like for me.Until i wised up to it. When i began to see what was going on and stepped outside of it, it became comical to watch them. Truly. I wonder how i ever fell for it. I came to realize that i fell for it because i inaccurately thought i was dealing with  rational people.Its not an easy to accept that the people who are suppose to love you and be there for you are constantly trying to manipulate and control you at whatever the cost.After I stood up to them and told them to stay out of my life,and my marriage...and started to set some healthy boundaries -it became a full blown war.Its a miracle my marriage has survived this far.If it wasn't for the wonderful woman i  married and her kindness and patience-i just dont know what i'd do.

Dennis, do you think i should accept her offer of giving me sole ownership? or should i just kindly decline her  "generous offer" and  file for bankrupcy? I'm not sure if thats even possible-but it just seems odd to me they want to give up their share of the house without me giving her anything for it.Maybe they are trying to avoid paying taxes?Since she said that her lawyer had already drawn out the papers and he was going to put down that they were giving me their share as a gift for 100 dollars and ofcourse i never gave them that.The IRS would charge her for giving away a house for free i'm assuming?...
I apologize for the long response-its just a lot to try to cover in a few lines.

Thanks again for responding Dennis, i really appreciate your input and advice on my problem.

Answer
As far as I understand, Victor, it's not going to cost her anything by giving you her share of the property. It just might be a loss for her. As long as her assets are under $1M, she can give away any amount up to $600,000. If you really want to know how much it will cost her, talk to a CPA or other tax expert. It wouldn't matter what you do with the property since you expect to virtually give it away. By the way, where is the property located?

Dick