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LegalGems
LegalGems, Attorney
Category: Estate Law
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Experience:  Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
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We have our farm in a trust that was filed in 1980! Someone

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We have our farm in a trust that was filed in 1980! Someone loaned money to someone against this property, as a reverse mortgage. Now they are saying they can foreclose on this property and have a sheriffs auction. The trustees of the trust knew nothing of this!
What can we do?
Submitted: 1 year ago.
Category: Estate Law
Expert:  LegalGems replied 1 year ago.

LegalGems :

Hi; My goal is to provide you with great service - if you have any questions during our chat, please ask! I'll do my best to ensure your satisfaction! I'm sorry to hear of this. You mentioned that the farm is in a trust. Was it placed in a trust by someone that passed away, and now the trustee oversees the trust for the beneficiaries? And the reverse mortgage- who allegedly consented to this, and when?

Customer:

My Dad consented to this! They wrote the paperwork as a Reverse Mortgage/Line of Credit. The paperwork says 70 year loan and $432,000.00. They say they gave him $220,000.00.They will not prove to me what they did! I can find about $65,000.00. They purchased a mobile home and put it on a foundation!!! There is $98,000.00 that went to something else but they say they can not tell me what that is because I am not Melvon S. Davis. He was 75 years old at the time!!! I have done all the research. There was never any money given to my father!!!!! Generation Mortgage of Atlanta, GA. is who is doing all of this!!!

Customer:

The question you had about the trust, sorry I didn't answer that, the trust was established in 1980. Filed in the courthouse in 1981. It is on the whole farm! The farm is 79 acres. We live in Malheur Co, OR. The farm is zoned farming. They are wanting what amounts to is about 5 acres. In Malheur Co. you can not just divide off property and do with is as you would like!!!

LegalGems :

If your dad was the legal owner of the property at the time he signed the reverse mortgage, then he would have legal authority to enter into any contracts including a reverse mortgage. If, however, the property was already in trust, then only the trustee, not the settlor, would be able to execute legal documents pertaining to the trust. If the land is not divisable based on ordinances, deed restrictions, etc, the lender could request specific court approval (i.e. a partition) but that would really depend on the various local ordinances and the deed itself. Is your dad alive or did he recently pass?

LegalGems :

If your dad recently passed, the trustee would have legal standing to discuss this with the lender. If he is still alive, if he gives someone a power of attorney they would have legal authority.

LegalGems :

I have checked the BBB and here is their link: http://www.bbb.org/atlanta/business-reviews/mortgage-brokers/generation-mortgage-company-in-atlanta-ga-27254866/complaints (I was checking to see if there was an abundance of complaints as then there might be a class action pending but I was unable to find one).

Customer:

He passed 2 years ago! The lender is not willing to even talk!!! They have done nothing to check on Planning and Zoning to separate the property! Nothing has ever been filed against this property at the county level!!! I have been there many times!!!

LegalGems :

Reverse mortgages need to comply with truth in lending laws. The person authorized to act on behalf of your dad (i.e. the trustee) should request proof that the applicable truth in lending laws were properly submitted and signed, or else often times the loan itself will be judicially voided (as penalty for not complying with the Truth in Lending statute).

Customer:

Planning and zoning laugh every time I walk in!!! The Records office said they started a Finacial Segregation of some type, that you can't do in Malheur Co., but never finished! A lawyer that I am talking to locally says that they can sell this small piece of property, and we have to get off. Again against Zoning in our county, and the trust!!! He thinks the trust would have to buy it back!!! It is the property that has the dwelling for the farm on it. If we lose this we can not put a dwelling back on it in another place because it is zoned farming!

LegalGems :

The trustee will need to contact the lender and request documentation that the reverse mortgage in fact existed; and then review it to ensure it complied with the truth in lending act. The heirs have the opportunity to pay back the reverse mortgage - assuming it is valid. Again, if the RM is valid, and the heirs cannot pay it back, generally the property is sold, and the heirs receive any remaining equity. But it is incumbent on the trustee to verify the mortgage and to verify the accuracy of the accounting, or the trustee can be held liable for any omissions/overpayments.

Customer:

I just talked to Planning and zoning while chatting with you! He just told me you can not create a financial segregation for a reverse mortgage because that is against the law!!! Do I get to talk to you again if I need more things answered on this matter!! Like today or tomorrow!!! You have helped me a lot in understanding the law that I need for just the RM. Thank you so much! This helped me greatly with where I need to go next!!!!!

LegalGems :

You are welcome. Yes, you can just come back here and post any follow up here. Are you the trustee or is that a different person?

LegalGems :

A partition that is illegal as against zoning/ordinance/CC&Rs (contained in the deed) would require a court order. So the planning department is correct in that.

Customer:

Yes I am the trustee!!! Again Thank you!!!

LegalGems :

You are welcome.

LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 3726
Experience: Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
LegalGems and 4 other Estate Law Specialists are ready to help you
Expert:  LegalGems replied 1 year ago.
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