divcomplex
New
Reged: 05/07/08
Posts: 3
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The current situation is me and my parents purchased a home that we are currently living in. My parent's used their joint bank accounts and I pitched in with the down payment. I wrote a check to my parents (I have bank records to prove this) and they deposited the check and gave a cashier's check to the lender.
The marriage between my folks has spiraled downward since moving in.
A few years ago we received suspicious forms stating that a modification to the deed of trust must be signed. Reason the lender gave was a deed of trust was not clearly established in the initial purchase. The modification letter read "insert father's name, a married man as his sole and separate property, and insert my name, a single man as joint tenants."
The part that concerned me was the description for my father. I did some research to understand the term "married man as his sole and separate property". I knew this statement was incorrect since my father and mother used a joint bank account to help pay for the house down payment. The only reason why my father's name and my name appear on the home loans is because both of us had the highest credit scores/incomes in the family. My mother can't provide significant proof of income.
I called the lender company and asked who worded the modification to the deed of trust. I insisted that the portion regarding my father needed to be worded differently in order to be accurate. Basically the lender company would put me on hold in the middle of our phone conversations. I had a reason to suspect the person was calling my father and checking to see what they should say to me. It was quite strange that my father was adamant about signing the forms. I held my ground and refused to accept the lender's smoke and mirror answers. Miraculously the situation went away when I sent a formal letter stating my refusal to sign the papers.
Now forward to the present and it's refiance time since our fixed rate is about to expire. I'm reading the loan papers again and it's deja vu. I'm reading the same clause "insert father's name, a married man as his sole and separate property, and insert my name, a single man as joint tenants."
My father has agreed to move out the house and leave it me and mom to live in. The loan will be under my father's and my name like the previous home loan. I would have to pay off the entire second home loan however. So in the end we are just refinancing our jumbo home loan and me paying off the second home loan. A processing fee of $500 will be required with no closing cost/fees for 5 year fixed. The 30 year fixed option will include closing fees/points.
Question I have is should I sign the loan papers despite my disagreement about the sole and separate property? Basically I'm looking out for my mother and don't want her to be screwed should my father to rescind his offer and decides to sell the house and get a divorce.
Also I'm worried about paying for the second loan now and later down the road the house is sold and my father will claim he contributed to the second loan being paid off (of course me and my father have separate bank accounts and I'll be sure to write the cashier's check from my bank account directly to the lender).
I researched that California is community property state. Meaning everything is up for grabs in a marriage/divorce case. However; I'm confused and worried when I read the following link and exception when a deed of trust is defined.
http://www.divorcesupport.com/divorce/California-Property-Division-Factors-440.html
Thanks for reading such a long drawn out story and advice is much appreciated.
EDIT: I don't know what's going on with the formating of my post. I apologize if this may be confusing for some readers.
Edited by divcomplex (05/07/08 04:37 PM)
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allthumbs
Platinum
Reged: 07/12/07
Posts: 574
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If your father is willing to give both you and your mother the house, then just simply have the new deed written that way without his name on it. He should sign a quit claim deed to the property. I'd try and keep his name off the loan as well. And why would he agree to be on the loan if he is giving you both the house? OR, are you saying he just is moving out but still wants to retain some ownership? If that's the case, is there enough equity to buy him out of his third (assuming it's an even split)? It should not be deeded as his sole and separate property without your mother's consent. And in fact, I'm not sure if that would be legal unless your mother consented by signing a quit claim deed. How is it deeded now?
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divcomplex
New
Reged: 05/07/08
Posts: 3
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Thanks for the quick response.
Me and my mother have offered him a buyout on what his portion would be. Every time he has declined it.
The modified deed is not even asking for my mother's consent nor has she signed any quit claim deed. I have to dig up the initial loan papers when we purchased the house to find out what the original deed stated when I get home. That reminder came into my head when I was typing my initial post.
I'm taking this as a NO do NOT sign the refinance papers. What if it was worded differently the deed portion? For example "Husband Buyer and Wife Buyer, husband and wife as community property, and Son Buyer, a single man as joint tenants."
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divcomplex
New
Reged: 05/07/08
Posts: 3
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I dug up the current deed when the house was first purchased.
"Father Buyer, an unmarried man and Son Buyer. A single man. All as joint tenants"
I can't believe I didn't catch this when we sat down and signed the papers with the lender company. Guess it was such a hectic environment and such a large stack of papers. I can look back and see how green I was to this whole home ownership situation.
I sat down and talked with my mother earlier night. I explained to her what the modification of the deed of trust is stating regarding my father and the advice given here. We both agreed it's better to cut our ties with my father and just sell the house and start over on your own.
Despite how much we love the house and neighborhood.
Later tonight I think all of us will sit down and discuss our plans.
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allthumbs
Platinum
Reged: 07/12/07
Posts: 574
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When a property is jointly owned, any one of the owners can "force a sale" to get their share. You may have a lawsuit or claim against the original title company for deeding that property the way they did. Your father was married but they stated he was unmarried. In CA, all property purchased during a marriage is considered community property. The house should have been deeded as joint property to a husband and wife with a tenancy in common with you, a single man. It appears someone was trying to pull a fast one. Or the title company just screwed up. But every time I have purchased and refied property in CA, the title company was very clear about getting it deeded properly. Anyway, just because it was deeded improperly, it does not mean your mother doesn't own a third (or whatever the split arrangement was). The law is clear, in CA, all property purchased during a marriage is community property. There could be a few exceptions, such as
one spouse inherits some money then buys stocks or investment property with it. Since an inheritance is NOT community property, the other spouse would have no claim. But there are ways around even that.
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