BellaOnline Forums Money Home Ownership What would you do?

A friend's husband bought a house in someone else's name,and as far as she knows,HIS name is not anywhere on the loan & definitely not on the title. She called the bank & informed them the guy who bought them the house does not live there (they keep getting mail in this guy's name) he lives in Chicago. She called them a week after the closing.

It's been nearly a month & she's worried they're gonna take the house back or something. SHOULD she worry? She asked them did she cause any trouble but they said no. What do they usually do in a case like that?

Oh,and the first mortgage payment is coming up. She does not feel right about this. I don't blame her. They have to make the payments in the guy who bought the house for them's name.

Is this the way it's usually done? Is it legal? Is there a way to protect themselves? The guy who bought the house just said he was doing her husband a big favor & not to miss any payments. He has excellent credit & has his own house.

they want to keep the house,but..Well,what do you guys think? What would you do? Please answer all questions so I can relay them to her.

Thank you.

N.
P.S. Please help. She is really worried they are going to take the house back. Is that what they usually do?
Please answer ALL questions so I can tell her.She ASKED them if there was any trouble but they said no. They were supposed to call her back but never did.Why would they call her anyway? Now the payment books haven't come & she's all worried that it's becuz they are in the proccess of taking the house back. Does that sound right to you? Don't they notify you first,if they are going to do ANYTHING?
(Note: She has OCD. Do you think she really has something to worry about regarding the taking house back or is it her OCD?)

Well it's not her house.. it's "the other guys" and they are pretty much just renting the house. If the house is in someone elses name, it's not theirs. No matter how many "payments" they make, it will never bet theres, because they are effectively just renting the place. At any time, the true owner can have them kicked out, or if he doesn't pay the mortgage (by pocketing the money they give him) then the bank can take it, and there is nothing they can do to stop it.

If their credit was so bad that they couldn't qualify in the current market (which is pretty much the best buyers market we have had in over a decade) then they shouldn't be in the house in the first place.

You do not say anything about paparwork. There MUST be some legal paper work. No person would buy someone a house, in their own name and just say to them "pay the rent", in case the rent was not paid, because who evers name is on the mortgauge and house deeds IS SOLEY responsible for that property, financially, as far as the mortage is concerned.

Making payments in someone elses name is illegal, and would probably be seen as fraud. THIS IS A SERIOUS CRIMINAL OFFENCE. She MUST check out whether they are paying ANY payment in a name that is NOT their own.

If they have AGREED to pay the mortgauge for the owner as RENT to him, then he is taking a big risk trusting them with it, if he has no contract with them, because he will be responsible for any debt on the house. Again, if they are paying in the owners name and not thier own this is ILLEGAL. ANY PARTY THAT IS DIRECTLY INVOLVED WITH THIS WOULD BE PROSECUTED.

So if the person renting does not pay, it will be the owner who gets into trouble over the moneys owed, the rentee may however find themselves kicked out, because the mortgauge is not being paid and the bank will of course claim back the property, because it would be their legal right. This does take time, and they WOULD probably recieve an eviction notice, BUT ONLY if the owner has said there are people living in the house, otherwise the relevant authorities would not know anyone was in there, and could just go and bourd it up, as far as I know.

Who ever the mortgauge name is in would be recieving any letters from the bank. Because a rentee has nothing to say about the owners house/legal buisness of owning the house/mortgauge.

She does not say if the Bank or owner had given them permission to disgus these matters with the bank, because techniqally it is not any of the rentees buisiness, as it is NOT their house.

Firstly She MUST check legally where they stand, with a atterney, ASAP, especially regarding the name in which they are paying any rent. but they need all the paparwork to do that I think.

If I was her I would phone the OWNER, AFTER legally checking that its all ok,(do not talk to him before, if you feel/know there IS a criminal case, because you could put YOURSELF in danger) and talk it over with him, ask for everything to be faxed or Emailed in writing so they know what is going on and have it as proof on paper. Then they can go to the bank/atterney with it if they need. It is also a leg to stand on for their own protection. I cannot belive they may not have ANY paperwork for renting the house from the owner.

The house belongs to the person paying the mortgauge, or whos name apears on the House deeds PERIOD.Any one whos name does not appear on the deeds is only renting, unless the mortgagee has signed the house over to them. But you would have legal proof of this. And it is HIGHLY unusual.

She does not say if her husband is worrying, or if it is just her. Is it because she does not understand the agreement fully betwwen her husband and the owner? Has he done them a favour, but it has obviously got muddled in her mind about what is going on.I would also ask her to bring up the matter again with her husband and ask him to explain all the details and if they are illegal, deal with it ASAP with LEGAL advice, they MUST cover their own back with regards to this for their own sake as soon as possible or they could be in serious trouble.

I do not say all this adivce as a legal person, I presume only that is is the right advice. I am NOT an Expert. But for the best proof/truth an atterney needs to advice them, and as soon as possible.

The bank knows about this. Remember she called & told them. A week later,they got the statement.Then the husband called & they told him to get his own checking account or use his wife's or make sure that both their names are on the check/money order. So,they are paying in THEIR names,not his. And were told to write "mortgage payment" on the check/moneyorder.Also the address & account number.He was told this at the closing. And she did bring it up with hubby,& this is what he told her. He's not worried..only her. She doesn't really know what went on that day,she was not there. He wanted to surprise her.
So you mean she shouldnt help the husband? Not let him use the checking acount?
It's been a month. Do you think the bank is going to do anything about it? I heard the bank doesn't care,they just want their money.
The guy that bought the house 4 them knows too,it was a verbal agreement. (He has his own house & very excellent credit. He put something of his up as collateral as well.) And the wife was not at the closing,so who knows what happened. The husand is going to tell the guy to put his name on the loan/title,along with his.
I'm confused....Some people say this is legal,you say it's not.
VERY confusing.

No,they are not giving the money to the owner. They are going to pay it directly to the bank,in their names.

So,they can't even pay in their OWN names? THAT'S illegal too?

This is what THEY'RE gonna do..
Talk to a lawyer,& tell the guy to put hubby's name next to his on the loan. If he says no,then they are not going to do it.
Thanks for your helpful advice,
N.
P.S. Bye!

Maybe it's just me but I'm a bit confused. I can't understand how the bank would let you pay for the mortgage if you are not on the loan. Is she sure that her husband didn't just have the friend co-sign? It just seems a bit odd.

I don't know,it is a weird situation, but as I said,they are going to see a lawyer & tell the guy to put their names on the loan. If he refuses,then they are not going to do it.
Thank you to all for your helpful advice. I probably won't be back (maybe in the future) but for now, goodbye!

Let me say this although DO NOT take this as legal advice.

1. You cannot just add someone's name to a mortgage loan. That is called a refinance. But you can add them to a deed.

2. Also, I don't think the bank cares who makes the payment as long as it is made. Think about it. If you were having trouble and your parents made your payment, would the bank care? No. They just process payments.

3. If the guy who financed the house has another mortgage with a bank for the house he lives in, then it would show up on the credit report. The lender would then ask him if he was buying a second home or an investment property. Depending on his answer to this is where the illegal stuff comes in. If the friend is a relative, it may very well be okay to let them live there if it is a second home. If not a relative, it would probably be considered an investment home. You see, the fraud has to do with interest rate. A second home has the same interest rate that a primary residence would. An investment home has a higher interest rate because the lender knows you are going to make money renting it or reselling it.

I don't understand why she called the bank if she knew the situation and the agreement. I really don't fully understand the post. I don't think anyone will take the house back if the mortgage is paid. All of this would only come into question if the mortgage is not paid.

I hope this helps you understand a little bit better.

Rosemary
Home Ownership Editor