Stuck On My Mom's Loan Forever!

Nckdl

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Apr 20, 2016
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Years ago after my dad died, my family moved in to help out my mom. She struggled with bills so she refinanced, with me as her co borrower. Biggest mistake! Jump forward, 3 yrs ago I went bankrupt on my half of the loan/credit cards.

1 year ago my mom informed me that after I went bankrupt it messed with the loan and they started sending back her payments so she just stopped paying them altogether. We tried to get her a loan modification or refinance fir a year, I even did a quit claim deed as was suggested by flagstar. The house is in foreclosure and sheriff sale was tomorrow but all of a sudden she now qualifies for modification. Looking at the paperwork my name is still there.

My mom told me that I was just signing that I pay her a monthly rent, which is true but I'm not sure what to do. My question is, right now I am not legally bound financially to the house. If I sign the loan modification, would that take all of that away.
 
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Moe Bedard

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Hello,

If you are a co-borrower on her mortgage, then she will need you to sign the loan modification paperwork to save her home.

The quitclaim you had done just takes you off the real estate deed/note. You are still legally obligated financially because you are still on the mortgage. You just now have no ownership interest in your mom's property.
 

Nckdl

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Apr 20, 2016
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My lawyer and flagstar stated I am not legally responsible because of the bankruptcy. If I sign the loan modification will that make me responsible again.
 

Moe Bedard

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Yes it will because it is a new mortgage contract that modifies the old one and supersedes it legally as well.
 

Christopher Haner

LoanSafe Member
Sep 6, 2017
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I would rather say that my lawyer and the flagstar had stated that I 'm not legally responsible and that is so because of the bankruptcy. And if I sign the loan modification than it would be like that make me responsible once again.
 

Erik Sandstrom

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It's the same loan number, you're not refinancing - just modifying the terms of the current loan. You may want to consult with your attorney again to see if a change in loan terms on the original loan would impact the property being included in BK. I don't see how they would be able to make you responsible unless you were to do a regular refinance into a brand new loan but I could be mistaken, I am not a real estate attorney.