Expert: Jim Root - 11/21/2007

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
Victor--

Please don't misunderstand me when I say "Soap Opera!" Your story is overwhelming & I sympathize with you! I see  why your inquiry to us sat in the "Question Pool" so long, though!It was not originally posted to me & I just found it today & almost decided NOT to respond as your situation is so complicated--& so much more than just about a defaulting mortgage! But I felt that SOMEBODY should TRY to help you,so here goes--

After telling your story, your question was "Do you see any hope...?" There's ALWAYS hope, Victor, no matter how bad things seem to be!There's always HOPE!

Here's my suggestion: (1)Mom said they're GIVING you their share in the Home? OK, that's good if true..Get Mom & Dad to LEGALLY sign over their interest in the property to you ASAP You should use an Atorney for this legal action!(2)Contact a Realtor or two & find out what your Home should sell for & select one to help you SELL the Home.If the suggested List Price is sufficient to pay off your existing mortgage & costs of selling, get the Home "on the market" IMMEDIATELY (3)If the Realtor's "appraisal" of the Home indicates that it would sell for LESS than you owe, you and/or the Realtor you've chosen to work with should contact your Lender, explain your situation to them & see if they will OK a "Short Sale" in  order to eliminate the costs in time, money & energy that a foreclosure would cause them!( A "Short Sale" lets the Homeowner sell the property for  Fair Market Value" even though the Lender will not get paid ALL of what's owed them by the Seller!)SOMETIMES a Lender with a Home in Default will approve such a Sale to preclude Foreclosure!If your Lender approves a "Short Sale," try to get the Home sold as quickly as possible at a price acceptable to your Lender!

So, you see "there's hope" for your situation with regard to the Home! But it's just hope, no warranty, no guarantees!
A local Realtor may have other suggestions with regard to your getting out from under your now-defaulted mortgage!An Attorney may be able to advise & assist you if your parents actions damage you financially, and a Family Counselor might aid i your coping with the very unusual relationship you all appear to have with each other!DON'T GIVE UP HOPE!

I am NOT an Attorney,NOR Realtor, NOR Family Counselor, but I've used the services of ALL three in my lifetime! Please don't take this message as advice from one licensed to practice those professions--but as my urging for you to get the professional help you need from any or all of them in order to get your life "back on track!" Good luck to you, Victor. I'm pulling for you!--JIM