Q: I am a trustee on a property that's in pre foreclosure. I would like to buy the home. Trust doc says we can buy and sell
The second trustee is not communicating with the family after helping herself to funds from the trust for her own use.
What can I do to redeem the property from the bank? Can I take over the loan and have the fees removed? Can I refinance although I'm not on the loan? The borrower has been deceased over 10 years. The bank recently found out the borrower is deceased and sent me docs to complete for communication and to determine what I plan to do with the property.
A: Your facts are dripping in self-dealing and breach of fiduciary duties, and the claim that one trustee stole funds while the other stole the property are just oozing from your question. The notion that trust instructions give you the power to buy and sell does not mean that you can buy and sell to your own account. You *desperately* need to review the facts privately with a lawyer, and you are flat out nuts if you provide any more facts on an open web forum.
A: Under federal law, family members inheriting property may be able to simply take over the mortgage payments instead of refinancing in certain situations. However, whether that is feasible depends on other factors, such as buy-out ability. If the property remains in Trust, it is sometimes possible for a trust to take out its own mortgage (or refinance) but that is more complicated than an individual getting a mortgage on their own residence. If the property is at risk of foreclosure then it would be wise to get guidance as soon as possible. Not doing anything could be a breach of fiduciary duties.
A borrower will need to have some interest in the property to take out a loan against it. A trustee should tread very cautiously when contemplating buying property held in the trust they are administering. If the trustee is one of the beneficiaries and entitled to receive part of the trust estate, and the trust instrument allows for it, then it might be possible to buy-out the other beneficiaries, deed the property, or to receive an in-kind distribution subject to the mortgage, but great care should be taken to avoid improper self-dealing.
While not legal advice I hope this general information helps. You may consider calling the state's foreclosure hotline at 1-877-462-7555 or reaching out to the foreclosure prevention project to get free information on the foreclosure process and timelines.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.