name added, removed from parents' house -- forced to sale?? HELP

[ja181]

In 2003/2004, things were good for me, and bad for my parents. They were facing foreclosure. We added my name to their house, and refinanced the property.

In 2006, things were better for them, and they were able to refinance the house and removed my name. This "transfer" was recorded in 12/2006, but signed in 8/2006.

I'm filing chapter 7, and my state, PA, allows a 4 year reachback.

I'm worried about this.

1. My name was only on the property 2-3 years, they've owned it since 1987
2. I was behind on payments in 2006, but that had nothing to do with why my name was removed from the property -- my parents' new mortgage company required it since I wouldn't be on the mortgage
3. My mom's name remained on the property for the entire time, my dad was removed and then re-added


Does anyone have any advice about this? Please? =o

[justbroke]

Is there equity? That's the real $50,000 question.

[ja181]

Is there equity? That's the real $50,000 question.

About 15-20k worth of equity. Mortgage is 125k.

I have a 63k Fed tax lien against me though...which the trustee I'm assuming isn't very motivated to recover funds for...

Or am I way off base?

[justbroke]

No, you're not off base. The home is encumbered by the mortgage and the $63K tax lien, I'm assuming. As such, there is no equity for the Trustee to pursue, and that's IF the Trustee was going to attempt some sort of avoidance or something.

I don't think there's any issue anyhow. The equity question will always stop the Trustee since there's no money to be had.

Of course, a good asset protection specialist/attorney could provide more specific things for your specific locale. Generally speaking, since the house was refinanced when it had no equity, and you were not a party of the new mortgage, it was sold (or transferred to them for your interest in the equity at that time. Since it had no equity at that time, your interest was $0. You received $0. So you received fair market value.

[ja181]

No, you're not off base. The home is encumbered by the mortgage and the $63K tax lien, I'm assuming. As such, there is no equity for the Trustee to pursue, and that's IF the Trustee was going to attempt some sort of avoidance or something.

I don't think there's any issue anyhow. The equity question will always stop the Trustee since there's no money to be had.

Of course, a good asset protection specialist/attorney could provide more specific things for your specific locale. Generally speaking, since the house was refinanced when it had no equity, and you were not a party of the new mortgage, it was sold (or transferred to them for your interest in the equity at that time. Since it had no equity at that time, your interest was $0. You received $0. So you received fair market value.

Oooooo, good point... I don't know if the no-equity applies though... I paid $1 for the property (when I was added) and I was paid $1 for the property (when I was removed), but at both times there was equity left in the property. 15-20k.

The tax lien isn't attached to the property..formally. It is filed in my state though (PA, the property is also in PA), and is filed in MD, where my name is still on another property that an investor has a quit-claim deed on, but hasn't been able to sell (since 1/2007). I'm listing that MD property as an asset and surrendering. No equity there.

My name was also on 5 other properties in MD (I rehabbed houses) more than 4 years ago, but within 10 years. I don't know if that would make a difference, but they can do whatever they want to them.

This is fun.

Thanks for your advice =)

[justbroke]

Well, I'll tell you one thing, your property situation is complex.

[ja181]

Well, I'll tell you one thing, your property situation is complex.

LOL I feel flattered..that you think *my* property situation is complex

Talked to the attny again today though, he thinks it will be fine, since I didn't pay anything for the property, and my mom's name was never removed from the deed... It is also apparently really difficult for a trustee to try for an avoidance on something beyond the 2 year federal limit...