Need advice please!

[rrockinggramma]

My son and daughter in law have been making payments on a home I thought they owned. Well my son just called me and told me that his wife's mother transferred the deed of the home over to them. However the mortgage remains in mother's name and they have just been making the payments on it. She (mother) claims the interest and property tax deductions on HER taxes. She also owns another home (newer) that she is making payments on as well. This is all located around Detroit Mi so you can imagine what is happening to prices etc.

So I filed under old law and am looking for advice.

1. because she has 2 homes, BOTH will go into the BK estate. The one my son and dil have has equity MI exemptions are like 3500.00 so it is way more than that.

2. the deed transfer was 2 years ago (not sure on this maybe more maybe less) but because she claims interest and taxes on her income statements that will be an issue also right?


So, should I recommend that son and dil start looking for a house to buy and give this one back to momma?

They were talking about refinancing the mortgage into their names but because they are insiders and the transfer was about 2 years ago, that could still cause issues, right?

So any advice would be greatly appreciated!!!!

[FreshLikeADaisy]

Gramma, maybe it's me, but after reading what you wrote I'm not real clear on who's filing bk -- son and DIL, or her mother (the owner of the properties). I'm assuming it's the MIL.

To be honest, if it's the mother in law, I think she's going to have a problematic bk anyway: not only the questionable transfer and the continued claim of the property on her own taxes, but because the mortgage on that house is now essentially unsecured: she transferred the deed to the kids, but their names are not on the mortgage, nor hers on the deed.

The kids would be wise to see an atty on their own, to be honest, not only because they need to know whether to stay or go, but because they REALLY need to know up front if they have any liability in the matter to the mortgage company.

I don't know this person, obviously, but my experience has been that when someone wheels and deals with the facts and figures as you have described, that's actually only the tip of the iceberg and the dishonesty goes much deeper. I would not be surprised to find, going forward, that there's a great deal more to it than you and the kids have been told. That's, again, why I strongly recommend that the kids go see a real estate atty on their own: God only knows what else she has used this property as collateral on, or what possible liens they may face while their name is on the title.

They could just move out and forget it, but personally, if it were me in their shoes, I would quitclaim the house back to MIL as soon as possible, get a rental, and call it a day. This would actually benefit the MIL's bk, because she would list the house as an asset directly, it would reverse what might potentially be seen as a fraudulent transfer, and she could make the argument that she intended the kids to have the house for many years, but they chose to move; iow, that it was not a temporary (and therefore fraudulent) transfer of assets. I don't know if that would fly, but it would fly a lot better than the property remaining in their name while she discharges the now-unsecured mortgage in a Ch7.

I don't want to trash talk a woman whom I have never met, and she may be as sweet as the day is long, but that kind of financial corner-cutting is never a good sign as to how trustworthy a person is. I just have a bad gut feeling about this for your son and his wife. Good luck!!!

[rrockinggramma]

You are not far off. It is the MIL. This woman took her daughter's inheritance from an aunt in Arizona ( a beautiful expensive home that was free and clear) and mortgaged it to the hilt (250,000) to build her own home in Auburn Hills, Michigan. That is how the kids ended up with the home in Berkley, Michigan. (MIL old house) The kids ended up selling the house for just what was owed on the mortgage(arizona house) and got nothing!!! So I agree this is probably just the tip of the iceberg. My son is going to call a BK attorney this week and get the real scoop on where they would stand before they rush off to refinance this place. I recommended they start house hunting. They can afford it, both engineers with the government. LOLOL

[FreshLikeADaisy]

Yeah, that makes a lot more sense. But instead of a bk atty, I would recommend a real estate atty. Why? Because God only knows how encumbered that title already is, and no matter what they decide to do with it, the title will have to be clear before they can get their names off of it, even via a quitclaim deed. Who knows but that while MIL had the property herself, she used it for collateral for other real property. *sigh*

In this situation, it seems to me that the bk is solely MIL's problem; making sure the kids come out of it free and clear is their own problem. Hence the real estate atty for them, because I think the first thing they will want to look into is a title search, along with an explanation of what possible liabilities they may face.

And to be honest -- I know this may sound cavalier on my part and I apologize -- if they get out of this and *all* they lost was her inheritance, they're really lucky. MIL doesn't seem to have any internal controls when it comes to wheelin' and dealin' other people's names, property, and financial security. If they can learn from this not to accept any other "kind offers" from MIL, they're much better off. The best sort of con always starts with the offer of a prize, doesn't it?

Anyway, best luck to them!!!

[rrockinggramma]

yes. I wanted to say to my son the other day that I am so glad it wasn't me that him in this mess. When my money trouble started back in 2000/2001 my son was in school. I ended up having to tell him he was on his own for school financing. He was so mad at me and was dating his wife at the time. So our relationship is ok but not super close. He blamed me for putting him in bad financial straits and in addition I could no longer afford his truck payment and his insurance (which was awful due to his reckless driving ticket as a teen) and I let it go. Well the day after the 30 day lapse in coverage he was rear ended and his truck was totaled. We let it go back to Ford but they have tried to come after him for the debt. As I was cosigned on the loan I included it in my chapter 13 and in Michigan the 6 year rule for suing is up in June this year. Up til then I had made all the payments but was at a point where rent and food were necessities for me and I just couldn't keep supporting my kids (had 2 girls also that were draining me financially) Well I included the deficiency in my chapter 13 but they will come after him when I am discharged. We have already talked about it and have a plan to offer settlement and at least we are talking about it. I used to be creative with my finances before my chapter 13 but all it did was get me into trouble. Steve did pay off a Discover card that was joint and he did it while in school and after I left him high and dry. But I never took their assets and turned them into mine. So in that regard I feel somewhat vindicated. And right now I am paying off his school loans for him.

[Minnymouth]

rrockinggramma,
Question, since you had to file Bk recently, you son is NOW married, etc....... why are you paying off his school loans??? Why can't he pay his own??
From your posting sounds like you have children that have drained you dry financially until you've had to file BK..... and they are mad at you??? They should be standing on their own two feet and helping you..............

Sounds like you have gone out of your way over the years to help your children with autos, school, and they are mad because you can no longer help them??

I may sound harsh, but tell them to "grow up, pay your own bills", Mom loves you but its time to support yourself and your own lifestye.

Sounds like the MIL has only caused them extra problems by "giving them a house".