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  1. #1
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    Default Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    I am trying to help my grandmother (and mother) get their estates in order. Here are the relevant facts:

    - Grandmother sold real property to John Doe. She is the mortgager.

    - Grandmother received a letter from Bankruptcy Court (in California, where the property is) telling her that she cannot contact John Doe because he is in the process of filing Chapter 13. Included in the letter is a form B10 ("Official Form 10") listing her name, address, etc., along with information about John Doe.

    - Grandmother does not have time / energy to pursue the matter, and quit-claims the property over to Mother.

    - Grandmother also grants Mother Power of Attorney for all matters.

    - Quit claim document is not recorded with the county yet (just signed).

    Questions:

    1. Would it be appropriate, in this case, to send a letter to John Doe's attorney (or to the bankruptcy court) stating, in essense:

    "Interest in this property has been quitclaimed to (mother). See enclosed documents (copies of quit claim). Please direct all future correspondence to XXX."

    2. Is the Form B10 informational, or is Mother (or Grandmother) supposed to make corrections and send it back in order to validate a claim before the deadline?

    3. Is quitclaiming enough to transfer interest in the "mortgage" from Grandmother to Mother?

    4. Should the Mother go to a Title company and "re-title" the property, and what affect would this have on the money still owed?

    THANKS SO MUCH for your great website!

  2. #2
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    What would be appropriate would be to avoid mucking up the title history with filings, when you aren't aware of either their propriety or legal effect. Your posts suggests that grandma has already transferred title to the purchaser, as part of her sale to the purchaser. Is this a "deed of trust" or "land contract"?

    If it is simply a mortgage situation, Grandma can assign her mortgage interest to somebody, who should then be able to act as the mortgage creditor in the Chapter 13 proceedings.

  3. #3
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    Quote Quoting Mr. Knowitall
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    What would be appropriate would be to avoid mucking up the title history with filings, when you aren't aware of either their propriety or legal effect.
    Under any other circumstance, I would do just that. However, in this case Grandmother and Mother (and the whole family) want it out of Grandmother's hands... for tax reasons, for estate reasons, and also going through a divorce. Current spouse has signed paperwork ("interspousal transfer" in California (real property belonged to my grandmother and her deceased first husband)) releasing any interest he may have had in the property.

    There is more to the story (isn't there always?). But the nut of it is that this needs to be out of Grandma's name and control. She and her second husband have created a huge financial nightmare for themselves, and it is threatening the entire estate. The Mortgagee has already been sending payments to Daughter, not Grandmother. We just need to make this all official before, frankly, she and her current husband dig themselves into a deeper hole, and drag the entire estate (and future inheritance) with them.


    Quote Quoting Mr. Knowitall
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    Your posts suggests that grandma has already transferred title to the purchaser, as part of her sale to the purchaser. Is this a "deed of trust" or "land contract"?
    It is a Deed of Trust. Grandmother is listed as 1st Deed of Trust on John Doe's Chapter 13 paperwork. He also has a second.

    Thanks for your prompt reply - look forward to more information from you all.

  4. #4
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    You need to make sure grandma is not defrauding any creditors.

    She and her second husband have created a huge financial nightmare for themselves, and it is threatening the entire estate.


    So what GRANDMA needs to do is hire a lawyer to protect GRANDMA'S interests.

    It sounds like (and I agree with MKIA) that y'all are fixing to screw things up royally.

  5. #5
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    She has no creditors. She owns her house outright.

    The main concern here is transferring rights to the lien against the property in the Deed of Trust ("sale").

    Again, to some degree she's trying to do what's in her best interest anyway. John Doe has been sending payments to Mother instead of Grandmother. Husband has released all interest in the property. Now she's worried about certain children trying to get ahold of the property when she dies. I know a will can take care of that - but she wants to transfer ownership to Mom now so there are no (or less) questions later.

    Also - she is doing NOTHING to pursue this Chapter 13 and John Doe's indebtedness to her. To put it plainly, she's just thrown up her hands and said, "forget it!" to almost $300,000 because she is friendly with John Doe, and is generally apathetic to performing any action without some degree of hand-holding. She's been talking about a will for years, power of attorney to Mom, Living Will, etc., transferring said property over to Mom, etc., but hasn't done anything... so we finally said enough's enough and got it all done.

    So what GRANDMA needs to do is hire a lawyer to protect GRANDMA'S interests.
    Grandma has a lawyer, who is also handling her divorce. Part of the problem, and I'm just being honest here, is that grandma is PART of the problem. She is purposely prolonging the divorce that SHE initiated. She complains that life insurance beneficiary is still current husband, but doesn't change it. She complains that John Doe hasn't paid her, but does nothing to pursue the matter. She's finally realized that Mom needs to help her before she completely destroys herself. Maybe it's a sad part of old age. I don't know. But there seems to be a point where someone needs to grab the reins and take over - for your own good.

    It sounds like (and I agree with MKIA) that y'all are fixing to screw things up royally.
    Some explanation and advice would be helpful. :-) I'd rather someone offer me diet advice than simply point out that I'm fat, thankyouverymuch.

    I talked to an attorney friend who recommended the quit claim. A real-estate attorney friend said the quitclaim is enough to transfer the lien. How the Chapter 13 fits in with the whole Trustee issue and Proof of Claim, I don't know. And I'm looking for further opinions on the matter. We do not want to, as you say, "screw things up royally," but this property really needs to be out of her hands. She knows that; it's why SHE suggested transferring ownership. She also keeps talking about putting her current house (which she owns free-and-clear and husband has also quitclaimed) to Grandson into a Living Trust, but HASN'T DONE ANYTHING. So Daughter is doing the legwork with Power of Attorney.

  6. #6
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    Quote Quoting valterra
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    ...
    Some explanation and advice would be helpful. :-) I'd rather someone offer me diet advice than simply point out that I'm fat, thankyouverymuch.
    ....


    For one thing, all this transferring back and forth of the right to the mortgage worries me. It has to be done 100% correctly.

    You said they had created a financial nightmare but you said they had no creditors.

    So I guess I am at a loss as to what you mean.

  7. #7
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    Default Re: Transfering Ownership Of A Mortgage During Chapter 13 Proceedings

    Quote Quoting seniorjudge
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    For one thing, all this transferring back and forth of the right to the mortgage worries me. It has to be done 100% correctly.
    Not back and forth - just transferring once.

    You said they had created a financial nightmare but you said they had no creditors.

    So I guess I am at a loss as to what you mean.
    Mostly that she just wastes money. But also is not pursuing John Doe. Bought, Sold, Rented houses (separate from aforementioned property) but kept no records, etc.

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