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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 37639
Experience:  Texas Attorney for 30 years dealing in real estate
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My wife Vicki has an adult daughter from her first marriage.

Customer Question

My wife Vicki has an adult daughter from her first marriage. Three years ago, just after her first husband died, Vicki took out a home equity line of credit on her home to help her daughter and son-in-law purchase a home. This loan financed 100% of the purchase of around $99,000 including new windows and roof. There was no lien placed on the purchased home. At the time, Vicki managed an inheritance from her first husband's mother that was intended to benefit Vicki's daughter, son, and step-son, and on an annual basis distributed about $14,000 to each of the 3 children, using most of her daughter's share to pay down the loan. Vicki and I got married on 8-1-2015 even though her children were not supportive. They expressed their opinion that I was marrying their mother for her money, so to counter their complaint, she gave the three children all of their grandmother's inheritance with no strings attached. As a result, her daughter has only paid the interest on the loan. This week she sold the first home and purchased another without paying off any of the original loan, and without discussing it with Vicki. Vicki has told her that the home equity loan is due (balloons) in just over 6 years. Her daughter's stated intentions are to continue paying the interest plus "extra" income from bonuses at work and tax refunds. We do have paperwork showing Vicki's daughter's acknowledgement of the debt, but Vicki and I would like to formalize the agreement and put a lien on the new house. Vicki's relationship with her daughter is better than it was but is still strained. Suggestion?
Submitted: 1 month ago.
Category: Real Estate Law
Customer: replied 1 month ago.
Also, the home equity line of credit is variable rate
Customer: replied 1 month ago.
Current balance is $66,000.
Expert:  Ray replied 1 month ago.

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

Expert:  Ray replied 1 month ago.

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

Expert:  Ray replied 1 month ago.

Your wife would want to do a second note and deed of trust here on the new house.You need the daughter to sign it.You can have her make regular payments or a balloon.This is the only way your wife has any legal protections.Your wife here can have title company or local real estate lawyer draw up the promissory note and deed of trust.This protects your wife in the even she needs the money in her life.Otherwise daughter may argue it was a gift later on.All you can do here is seek to have her sign these.It would give your wife right to foreclose in the event of default here in Iowa.

I appreciate the chance to help you tonight.Thanks again and the best.

Expert:  Ray replied 1 month ago.

Lawyer Referral Directory

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Iowa

Iowa State Bar Association LRS
Des Moines, IA

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Expert:  Ray replied 1 month ago.

Happy Thanksgiving to you too.

If you can rate 5 stars when we are done it is much appreciated.

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