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socrateaser
socrateaser, Attorney
Category: Business Law
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Experience:  Retired (mostly)
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California: My elderly mother is in escrow on her mobile home

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California: My elderly mother is in escrow on her mobile home from which she moved 2 year ago, offering owner financing to make the sale. My husband and I loaned her money to buy the mobile she lives in now, close to us. Due to falling prices, the money from the sale is not enough to cover our loan to her. (We have a signed note, that's not a problem.) It would be most clean and easy to have the Security Agreement and the Promissory Note made out to me and my husband (this is fine with mom) but we need some sort of paper trail, saying mom is assigning the note to us "in partial payment of our loan to her," so that it does not look like mother is "gifting" the mobile sale income to us. Our finance person said to have this statement put into the escrow documents, but because a mobile is considered personal property and not real estate, there are no escrow documents for us to keep. Can we use a separate Assignment of Note form, or just put words in the Security Agreement and/or note?
Submitted: 5 years ago.
Category: Business Law
Expert:  socrateaser replied 5 years ago.

Have your mom sign a statement something like, "In consideration for the release of lien on the OLDMOBILEHOMEDESCRIPTION, Borrower, hereby consents to registration of a lien on the NEWMOBILEHOME with the DMV, to secure the prommissory note between Lender and Borrower, made DATEOFORIGINALNOTE. As further consideration for this agreement, Borrower agrees to pay all of the net proceeds from the sale of the OLDMOBILEHOMEDESCRIPTION to Lender as partial payment on the balance of the promissory note."

 

Then you register your lien on the new mobile home with the DMV, and you're done.

 

 

Customer: replied 5 years ago.
Thanks very much, this is helpful but doesn't address two important things which JustAnswer didn't give room to write. We'd like the buyer of mom's old coach to sign the Security Agreement and Promissory note with my and my husband's name on them, not my mom's name (this is fine with her), for two reasons:
1) If mom dies in the next 5 years, there won't be a hassle getting the lbuyer's loan payments switched to us instead of mom (or her estate), and
2) If the new buyer (of her old coach) doesn't pay for some reason, my husband and I can foreclose on her without getting my mother involved.

Sorry to cause you to do more work for my paltry payment! We have made so many mistakes trying to get the place sold over two years that any extra money spent is pretty painful at this point, and my mom will never get back the $15,000 she's paid in space rent for a place she wasn't living in. I'm grateful for this service and your help.
Expert:  socrateaser replied 5 years ago.

I don't know if understand what you're trying to do.

 

If you want the buyer to assume your existing loan and lien, then just have the buyer sign a new note, consent to possessory lien, and then release the lien against your mom and stamp her note paid in full.

 

Now you're financing an arm's length third party. Don't charge more than 7%, or you're violating the usury laws.

 

 

 

 

 

Customer: replied 5 years ago.
If there's a way I can increase the payment to you, I will, but if you want to bail after you get this, I understand.

We don't actually have a lien on mom's old coach. We only have a promissory note from her for the loan for the new one, and an oral understanding that she'd pay us when her old place sold. We never expected that mom would have to offer owner financing to sell the old one, but that's the only way we've attracted potential buyers for the past year. Now with the low sale price, and the fact that we're increasing our loan to mom to cover cash fees to close the sale (which will require a new note from her to us), we're trying to figure out if there's some clear, legal way to get the new buyer to pay us directly as partial payment of our loan to mom, to get her out of the loop in case she dies. When she dies and we sell the current coach she's in (I'm executor and it's in her will), we'll recoup the rest of the loan (and we have paperwork on that, or we will).

The financing to the buyer of the new place is 6.5%.

I guess we ARE doing what you said, "financing an arm's length third party." I'm thinking we should probably talk to a local lawyer as it seems to be getting more complicated. So if you want to just stop here, that's OK with me and I'll pay the $20. If you can still offer me some "entertaining comments" that can help, I'll up the payment if this system will let me. Thanks for listening.
Expert:  socrateaser replied 5 years ago.

Have your mom sign a new security agreement and note for the old coach, register the lien with the DMV, mark the old note paid in full, and then when the buyer appears, that person will have to either pay off the loan or take the coach subject to your lien, which you will have to transfer to the buyer when you register title in the buyer's name.

 

 

socrateaser, Attorney
Category: Business Law
Satisfied Customers: 33781
Experience: Retired (mostly)
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