If my mom bought a house under my name and it’s under water, what is my best option to get rid of it?
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If my mom bought a house under my name and it’s under water, what is my best option to get rid of it?
We owe $175,000 refinanced loan + $150,000 HELOC; house is worth $200,000. I’m not living in this house, my mom is, although it is not filed as a rental property. She has been giving me money to pay for the loans. I want to do a short sale but I don’t think the bank will approve due to my income. Is possible for me to somehow transfer the property to my mom so she can do a short sale?
Asked on January 25, 2011 under Real Estate Law, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Unfortunately you can transfer ownership but you can not transfer the mortgage. And if you try and transfer the ownership the bank will call in the loan anyway. The only way to get the loan out of your name is to sell the house to someone else and have the bank paid off. But you will have the problem with a deficiency judgement and the bank coming after you for the money. Here is what you need to do: try and sell the house. When you have a potential buyer you need to negotiate the HELOC to be paid off a certain amount and to waive the deficiency. Same with the primary mortgage. Then you can talk real numbers with the bank. Otherwise, you can try and offer them a deed in lieu of foreclosure but you will again have to negotiate the deficiencies. Get some help. Good luck.
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