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JaxLaw
JaxLaw, Lawyer
Category: Legal
Satisfied Customers: 1725
Experience:  Estate Planning (i.e. wills, trusts, power-of-attorney doc.s, living wills, etc.), Probate and more
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My brother has a loan on my fathers house that my father signed

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My brother has a loan on my fathers house that my father signed for & my brother is the one the money was really for. My father has since died & his home is in trust with my brother & me as equal heirs. The loan is being paid by my brother but what should I do since he doesn't want to re-fi (or can't) in his name? Get something legally binding to insure that he IS liable & how will this loan effect my credit rating? Will the loan even show up on my credit rating?
Submitted: 4 years ago.
Category: Legal
Expert:  JaxLaw replied 4 years ago.

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

 

You are not liable for his loan whatsoever (unless you signed something as a guarantor or co-signor). However, the lien would still be on the property meaning that the bank could foreclose if the loan wasn't paid. You would lose your interest in the property if this were to happen, but the foreclosure would not affect your credit.

 

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

Customer: replied 4 years ago.
Do you know if the loan shows up now on my credit or would it only show up on my Dad's credit even though it's in his trust? Would be be better for me to have something signed by my brother saying that he is solely responsible for this loan or would that even matter since we are both equal in the trust? So if he defaults on the loan would they foreclose on the home & that would show up on both my brother's credit & mine?
Expert:  JaxLaw replied 4 years ago.

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

 

It is not on your credit because it is not your debt. If your dad personally signed for the loan it would be on his credit. If your brother were to default on the loan, it would not show up on your credit (and maybe not even his if he did not sign for it).

 

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

 

 

 

 

Customer: replied 4 years ago.
My brother handles the loan/paper work & I don't receive anything on that loan. So, if he defaulted & never told me he wasn't making payments, I may never know until they foreclose on the house? Would the loan company try to notify the heirs in the trust that the loan was in default before they foreclose? Would it make ANY difference if my brother had a signed legal paper making him responsible for the loan? If he defaulted would the bank give me time to take carfe of the loan?
Expert:  JaxLaw replied 4 years ago.

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

 

In foreclosure proceedings, the lender must notify the owners and/or occupiers of the home. The owner of the house (from what I have gathered from your question) is the trust. This means they would notify the trustee of the trust. The trustee should notify the beneficiaries of the trust if and when any trust asset may be foreclosed upon.

 

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

Customer: replied 4 years ago.
But would it matter if I had a note(legal Paper) from my brother or not in regards XXXXX XXXXX responsibilty of the loan? Or is buying out the loan from the trust & putting the home in my name to only way to guarantee I was be responsible for my brother's loan? Which right now is not financially possible!
Expert:  JaxLaw replied 4 years ago.

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

 

Having the note would allow you to collect the loan amount if he were to stop paying the loan and you had to buy out the loan to save the property (i.e. you would have more of a chance of being repaid). However, if your brother were to stop paying the loan to the bank (who also has a note) there is no guaranty that he would pay you either. But just to reiterate, you are not responsible for the loan, but can pay it off to save your interest in the property.

 

DISCLAIMER - This answer is not legal advice. No attorney-client relationship is formed. The information provided is for educational purposes only. For specific advice regarding your situation, please consult a qualified attorney in your area.

JaxLaw, Lawyer
Category: Legal
Satisfied Customers: 1725
Experience: Estate Planning (i.e. wills, trusts, power-of-attorney doc.s, living wills, etc.), Probate and more
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